General Motors sells off all Korean service centers amid exit rumors

GM Korea is selling service centers and assets in a potential exit from Korea, primarily due to heavy tariffs affecting its business, while continuing to support customers.

The GM logo is seen on the facade of the General Motors headquarters in Detroit, Michigan on March 16, 2021. [REUTERS/YONHAP]

GM Korea, the Korean unit of General Motors, is divesting all of its service centers and underutilized facilities and idle assets at its plant in Bupyeong District, Incheon, in an apparent move toward a phased withdrawal from Korea amid the U.S. tariff war.

“GM Korea plans to sequentially sell its nine company-owned service centers across the country while continuing to provide customer support through its network of 386 authorized partner service centers,” the company said in a statement Wednesday afternoon, adding that employment will be maintained.

“GM Korea is in discussions with various stakeholders regarding the potential sale of idle assets and low-utilization facilities and land at its Bupyeong plant.”

This latest liquidation decision is widely seen as a step toward GM Korea’s speculated exit from the Korean market. The company has faced a significant blow to its business viability following U.S. President Donald Trump’s slap of a 25 percent tariff on imported automobiles.

GM Korea sold a total of 499,559 cars in 2024, and of them, exports made up 95 percent, or 474,735 units. Of the exports, 88.5 percent, or 418,782 units, were shipped to the United States. The shift in focus to exports was triggered by plunging domestic sales, which peaked at 180,275 in 2016 before slipping 87 percent to 24,824 units in 2024, the lowest figure for any carmaker in the country.

GM Korea CEO Hector Villarreal speaks at the company's plant in Changwon, South Gyeongsang, on May 16. [YONHAP]

The carmaker produces two models in Korea: Trailblazer compact SUVs and Trax crossover SUVs. It owns three manufacturing plants — two in Bupyeong District, and one in Changwon, South Gyeongsang. The other Bupyeong plant has been shut down since 2022.

GM is obliged to run business in Korea at least until the end of 2027 under its agreement with the Korean government, where it supported with 81 billion won ($60 million) when it once attempted to pull out of Korea in 2018 as part of global restructuring plans.

“Maximizing the value of idle assets and rationalizing the operations of loss-making service centers are critical to maintaining the company’s long-term sustainability,” GM Korea CEO Hector Villarreal said.

“Our current vehicle production programs still have several years ahead, and this measure is important to securing business efficiency moving forward.”

BY SARAH CHEA [chea.sarah@joongang.co.kr]