SEOUL Feb 22 General Motors Co said it
would invest $7.3 billion in its South Korean unit over the next
five years -- an amount which will likely help relieve concerns
that the U.S. automaker was set to reduce its presence in the
Fears of output cuts and layoffs had grown after GM said it
was interested in gaining full control of GM Korea by buying a
17 percent stake from the unit's second-biggest shareholder, a
move that was seen as possibly paving the way for restructuring
Those worries intensified after GM Korea said late last year
it would not build its next-generation Chevrolet Cruze small car
in South Korea.
But GM said its 8 trillion won investment in improving
manufacturing and engineering capabilities underscores South
Korea's importance as a key production and development base,
even if the domestic market is relatively small.
"GM Korea will continue to play a major role in our global
growth plans," Tim Lee, head of international operations at GM,
said in a statement.
GM Korea, which has five manufacturing facilities in South
Korea, said it will produce six upgraded versions of GM models
currently built, including global mini, small and midsize cars.
It reiterated it will build GM's first global full battery
South Korea exports Chevrolet-branded cars to Europe and
other regions and accounts for about a quarter of GM's Chevy
production globally. Its also has design and engineering centres
in South Korea, which have developed the Spark and Aveo mini
cars and the Trax sport utility vehicle.
GM Korea reiterated a plan to double the size of its design
center at its headquarters in Incheon by the end of this year,
making it GM's third biggest after the United States and Brazil.
GM, which is the No.3 automaker in South Korea after Hyundai
Motor Co and its affiliate Kia Motors Corp
, aims to nearly double its South Korean market share
to 20 percent for the mid- and long-term.