GM Korea keeps doors open, adds ‘new’ compact SUV

GENERAL Motors’ Korean carmaking operations have locked in their future after last-minute talks between the company and unions brokered an agreement ensuring the survival of the business.

As part of the deal, GM Korea will build a new small SUV for export markets, potentially including Australia.

GM was to have decided the fate of its troubled Korean operations on Friday, but extended the deadline until Monday to give negotiators more time to agree to a rescue plan, the Korea Times reported.

The carmaker announced in March that it would close South Korea’s Gunsan manufacturing plant by the end of May. “The Gunsan facility has been increasingly underutilised, running at about 20 percent of capacity over the past three years, making continued operations unsustainable,” GM said in a statement. “This announcement occurs after a careful review of the company’s operations, which have sustained significant losses for the past several years.”

GM Korea exports many more cars than it sells. In March, it sold 6272 vehicles domestically, while 34,988 were sent to other markets, including Australia. Of the 15,021 Korean imports arriving in Australia last month, at least 1115 of them wore Holden badges – the actual number is slightly higher as Holden does not split sales of the Polish-built Astra hatch and the Astra-badged, Korean-made Chevrolet Cruze sedan. That acounts for at least one in every five of Holden's sales for the month.

GM has hinted at its thinking for the next-generation Holden Trax – the "new" vehicle believed to be queued up for the Korean production line – via the FNR-X concept SUV unveiled in Shanghai last year. Sized about the same as the Toyota C-HR, the concept has hinted that the Trax is likely to add a plug-in hybrid drivetrain.

Chevrolet is at the Shanghai Motor Show, which starts tomorrow.