Amid the threat of a 25-percent tariff on all imported vehicles and auto parts, General Motors’ South Korean subsidiary is reportedly facing a severe crisis since the vast majority of its vehicles are exported to the United States. GM Korea is the exclusive manufacturer of all US-market Chevrolet Trax and Trailblazer crossovers, as well as the popular Buick Envista and Encore GX, and a staggering 84 percent of its local output ends up here. Those brands’ cheapest offerings could suddenly become much more expensive if the Trump administration maintains course with its tariffs, leading to significant effects for GM Korea as a whole.
GM Korea May Seek Assistance From Home Government
As reported by The Korea Times, GM’s local subsidiary will need to seek an exemption from the Trump administration, allowing it to continue importing the cheap-and-cheerful Chevy Trax at current duties. Otherwise, the news outlet reports that GM Korea would need to incur massive losses to continue local production of the crossovers and that it would likely shutter its plants instead. The subsidiary employs 11,000 people at two manufacturing facilities in the country, one of which builds the Trax and Envista twins, while the other handles the Trailblazer and Encore GX.
If GM isn’t able to secure an exemption from the Trump administration on imported vehicles, its Korean arm may instead turn to local government. Quoting Kim Dae-jong, a business administration professor at Sejong University, The Korea Times reported that the automaker would need to receive additional incentives to continue operating in the country. For its part, South Korea’s Ministry of Trade, Industry, and Energy is expected to reveal a set of emergency measures intended to help companies like Hyundai Motors, GM Korea, and Samsung continue doing business in the US.
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The Chevrolet Trax Was A Surprise Hit For GM
Upon its return for the 2024 model year, the second-generation Trax quickly proved to be one of Chevy’s most popular crossovers. In its first full year on the market, the Trax found more than 200,000 homes, nearly doubling the sales of the smaller and more expensive Trailblazer and nearly catching the 207,000-unit-strong Equinox. With a starting price of $21,795 including $1,295 destination, the Trax is Chevrolet’s cheapest vehicle on the market today, undercutting the Trailblazer by $2,600 and the Malibu mid-size sedan by $5,200.
The results are similar at Buick, where the Trax’s Envista mechanical twin has become the brand’s second-most popular vehicle. Its 2024 sales of 51,315 outpaced the stylish Envision and nearly caught the Encore GX, which found just over 58,000 new owners. Like the Trax, the Envista is Buick’s cheapest product, starting at $25,095 and capping at around $32,000 hard loaded, and it too offers plenty of functionality and space for that price – provided potential buyers are okay with front-wheel drive and a rather ho-hum powertrain. Unless GM Korea and the US government can come to some kind of agreement, American consumers might lose out on these inexpensive crossovers for quite some time while the automaker scrambles for some kind of localized solution.
Source: The Korea Times
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