Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

4-Traders Homepage  >  Equities  >  Nyse  >  General Motors Corporation    GM

SummaryQuotesChartsNewsAnalysisCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsSector newsTweets

GM to Invest $7.3 Billion in South Korean Unit

share with twitter share with LinkedIn share with facebook
share via e-mail
0
02/22/2013 | 12:45pm CEST

BUPYEONG, South Korea--General Motors Co. (>> General Motors Company) has announced plans to invest 8 trillion won ($7.3 billion) in GM Korea Co. over the next five years, as it seeks to assure the market that it is committed to keeping operations in Asia's fourth-largest economy.

Its announcement comes amid speculation that GM might reduce the functions of its Korean plants, stripping their research and development functions and narrowing them to a manufacturing base for global exports. This could affect 3,500 engineers employed in the R&D department.

In a press briefing held Friday in Bupyeong, South Korea, GM International Operations President Tim Lee said the "huge" investment will go into developing six all-new vehicles, bolster dealerships and improve production and design facilities.

But the executive didn't elaborate on how the money will be divided, and also didn't mention any details for the planned models.

In the past 10 years, the Detroit-based carmaker has invested an average of KRW1 trillion each year in its 76.9%-owned Korean unit.

GM Korea is currently in talks with Korea Development Bank to buy back a 17.08% stake in GM Korea from the state-run bank, which had sparked market chatter that the auto company might be seeking to make an exit. It also cut about 8% of its workforce last year, and won't roll out the next-generation version of the Chevrolet Cruze compact starting from 2014 in its Gunsan plant.

But regarding the stake purchase issue, Mr. Lee said the company had to buy it back "eventually."

"We have simply chosen to do so to redeem our shares," he said, asking reporters to interpret it nothing other than a transaction.

He also said that starting from the second quarter, GM Korea will start producing the electric version of the Chevrolet Spark mini car in its Changwon plant for the use of government organizations.

Currently, GM Korea is in charge of the production of one fourth of vehicles carrying the Chevrolet marque for its parent company and exports eight out of 10 vehicles built in its domestic plants--Bupyeong, Gunsan and Changwon.

The company sold a total of 800,639 vehicles last year, down 0.9% from a year earlier due to sluggish domestic sales and as a strong won cut into its overseas earnings when repatriated into the local currency. In the domestic market, its shares rose slightly to 9.5% last year from 8.9% a year ago, supported by the weak performance of its peer Renault Samsung Motors.

Mr. Lee cited keeping "collaborative" relations with its union and strengthening in the Korean won as major challenges for GM Korea this year.

GM Korea produces nine Chevrolet models, including the Spark mini car and the Orlando seven-seat recreational vehicle, from its domestic plants for local sales and exports.

The company also makes the Alpheon largesize sedan and the Damas and the Labo mini commercial cars that don't carry the Chevrolet badge, though it recently decided not to produce the mini cars due to low profitability.

Separately, it has recently strengthened the Cadillac lineup with the Cadillac ATS sedan to benefit from the free trade agreement with the U.S. and a growing demand for imported cars in Korea.

Imported carmakers held 10% of the South Korean passenger car market last year, which forced Hyundai Motor Co. (>> Hyundai Motor Co) and Kia Motors Corp. (>> Kia Motors Corporation), the country's dominant carmakers, to cut prices on their flagship models.

Write to Kyong-Ae Choi at [email protected]

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on GENERAL MOTORS CORPORATION
09:05a HOLDEN’S PRODUCT OFFENSIVE CON : Astra sportwagon is here
09/23 GENERAL MOTORS : GM, Disney, Shell and 1,200 other companies taking steps to fig..
09/23 GENERAL MOTORS : GM's purchase of power from wind farms aims to green future
09/22DJGENERAL MOTORS : GM to Eliminate Shift at Tennessee SUV Plant, Lay Off Hundreds ..
09/22DJGENERAL MOTORS : GM to Eliminate Shift at Tennessee SUV Plant, Lay Off Hundreds ..
09/22 GENERAL MOTORS : GM to furlough 3rd shift at Tennessee plant as demand slows
09/22 GENERAL MOTORS : Rise of sustainable electric automobiles and the end of petrol ..
09/21DJGENERAL MOTORS : to Lay Off Over 250 Workers at Ontario Plant
09/21 GENERAL MOTORS : Studies from General Motors Have Provided New Data on Workplace..
09/21 GENERAL MOTORS : New Machine Learning Study Findings Reported from General Motor..
More news
News from SeekingAlpha
07:24a Deutsche Bank latest to see upside on GM
09/24 Harvey And Irma Won't End Carmageddon
09/22 GM lays off hundreds at Tennessee SUV plant as sales slow
09/22 MAGNA INTERNATIONAL : Even Car Of The Future Will Still Need A Metal Body
09/22 GM : Don't Pull The Trigger Just Yet
Financials ($)
Sales 2017 148 B
EBIT 2017 9 494 M
Net income 2017 8 580 M
Finance 2017 8 015 M
Yield 2017 3,81%
P/E ratio 2017 6,71
P/E ratio 2018 6,78
EV / Sales 2017 0,33x
EV / Sales 2018 0,37x
Capitalization 57 443 M
Chart GENERAL MOTORS CORPORATION
Duration : Period :
General Motors Corporation Technical Analysis Chart | GM | US37045V1008 | 4-Traders
Technical analysis trends GENERAL MOTORS CORPORATION
Short TermMid-TermLong Term
TrendsBullishBullishBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus HOLD
Number of Analysts 24
Average target price 39,3 $
Spread / Average Target -0,18%
EPS Revisions
Managers
NameTitle
Mary Teresa Barra Chairman & Chief Executive Officer
Daniel Ammann President
Randall D. Mott Chief Information Officer & Senior Vice President
Patricia Fiorello Russo Independent Director
Carol M. Stephenson Independent Director
Sector and Competitors
1st jan.Capitalization (M$)
GENERAL MOTORS CORPORATION12.23%57 443
TOYOTA MOTOR CORP-2.09%196 124
DAIMLER-5.83%85 152
VOLKSWAGEN3.19%84 622
BAYERISCHE MOTOREN WERKE-4.12%66 138
HONDA MOTOR CO LTD-1.70%54 204