[THE INVESTOR] BUPYEONG, Gyeonggi Province -- Amid market rumors of General Motors pulling out from South Korea, the GM Korea vice president said the US automaker is here for the future, stressing the country’s role as a strategic hub.
In an exclusive interview with The Korea Herald, Dale Sullivan, vice president of vehicle sales, service and marketing at GM Korea, said the company is set to reach 1 million sales for its Chevrolet vehicles here in August, taking the shortest time compared to other GM operations in emerging markets, except for China.
GM Korea Vice President Dale Sullivan
Calling it “a milestone,” the record shows why GM wants to stay here, he said.
“Next month, we go over a million sales for Chevrolet since its introduction. One million sales of Chevrolet from 2011 till now,” said Sullivan at the automaker’s headquarters in Bupyeong, some 30 kilometer west of Seoul.
“A million is a big number and we can build on that, we can build for the future.”
There had been market rumors of GM’s withdrawal from Korea, as the automaker struggled with sales in the first half, faced worsening conflicts with labor and unexpectedly announced the resignation of its CEO James Kim earlier this month.
“A lot of people think we are not here for the future. But we are here for the future, we have products for the future, we have made our cuts that we needed to for General Motors and looked for where our profitability is,” he said, adding that Kim leaving GM Korea was a personal decision.
As of July, GM Korea sold over 980,000 units of Chevrolet vehicles here. It has a full lineup from compact cars to sport utility vehicles.
South Korea is the fifth-largest market for Chevrolet. The brand has been gaining strength here, as demonstrated by the surprising sales of its sedan Malibu, with over 30,000 of the sleek sedan sold last year. The Bolt EV, an electric vehicle with a mileage of 383 kilometers per charge, was sold out within two hours after its debut in April.
And the automaker will bring in more hit vehicles soon, perhaps the next Trax, said Sullivan.
“SUV and CUV markets are big and we need to have the next Trax, I won’t say a replacement of Trax, but an SUV that (would) really do well,” he said.
“We do have such plans, there’s no reason for us to pull out from Korea. What we are doing is to show how GM is taking its operation in Korea seriously. You are going to see more of winning products in GM Korea.”
In 2002, GM acquired Daewoo Motor, formerly an auto unit of now-defunct Daewoo Group. The state-run Korea Development Bank holds 17.02 percent of shares in GM Korea as well as the right to veto the automaker’s board decisions to leave South Korea. But the right expires in October, raising concerns among the unionized workers at GM Korea’s factories across the country. They are urging the government to stop GM if it leaves. Sullivan refuted the labor’s argument that such rumors have been going on for a long time.
“It is a private agreement between us and them. The minority owner remembers there are a lot of issues that do not expire this year, and it is not going to really change the way we are doing business.”
Citing a direct comment from Stefan Jacoby, GM executive vice president and president of GM International, Sullivan said, “GM Korea is a global manufacturing, design and engineering hub for the company,” with 2,000 people just for engineering here.
A list of projects is currently underway to study how to improve profitability.
GM Korea saw around 2 trillion won (US$1.78 billion) of losses over the past three years, largely due to poor sales here and demand shifting from compact cars to SUVs, which had hit the automaker hard as it held a major share in the compact car market in South Korea.
Asked whether the losses involved workers demanding higher wages, the vice president said this is not an issue faced only by GM Korea.
“I don’t think it is unique in GM, I think it is a Korean thing,” he said. “I studied some Korean companies and in automobile business, it (the loss) can be absorbent in a sense quicker than smaller companies because you are selling products that are a lot expensive.”
Sullivan has been taking charge of the automaker’s sales, marketing and customer service since February 2016. Prior to his role in South Korea, Sullivan was the regional director of the Chevrolet West Region in the US. He also launched the brand in China.
Koreans respond fast to changes in the auto industry, such as in the ways vehicles are purchased and used, observed Sullivan.
“Korean consumers are adapting to that (changes) a lot quicker than I’ve seen in other markets. And I think it has to do with how fast the technology has happened here and that leads us to do a lot of things like (the) Bolt EV,” he said.
By Cho Chung-un/The Korea Herald (firstname.lastname@example.org)