From Samsung’s growing dominance in mobile electronics to the annoying ubiquity of “Gangnam Style” at proms, weddings and parties, there’s no question that South Korea has gone far beyond a regional backwater to a global powerhouse. It also holds strategic importance to global automakers, and we’re not just talking the usual suspects, Hyundai and Kia. General Motors has announced a $.7.3 billion investment in its South Korean operations over the next five years, following an expansion of its Korean design center in Incheon, according to Reuters.
GM’s previous announcement that it was seeking to gain full control of GM Korea by buying the remaining 17 percent share, as well as the announcement that the next-generation Cruze would not be built in Korea raised concerns that the company was planning on either major restructuring of its Korean operations, or transferring some of the current roles and responsibilities of the operation elsewhere.
GM Korea has played a key role in the development of a number of newer GM passenger car models, including the Chevrolet Malibu, Chevrolet Sonic, Spark, Cruze, and the Chevrolet Trax small crossover, a version of which is sold in the U.S. as the Buick Encore. The U.S. market Chevrolet Spark, and Buick Encore are both built in Korea.
Although the Korean domestic car market remains relatively small compared to such markets as China, Brazil, India and Russia, Korea remains an important production base for GM, with five plants. GM’s goal is to increase its market share in the Korean market to 20 percent, with most of that growth expected to come from the Chevrolet brand. Corporate twins Hyundai and Kia dominate the Korean domestic car market.