German Automakers Outsell GM in South Korea

BMW and Mercedes both sold more vehicles than did General Motors in South Koreas for just the first time, during February. Sales were helped by the increasing popularity of the premium brands from Germany as consumers shift away from U.S. based GM after it made an announcement it would go under major restructuring in South Korea.

While South Korea based automakers Hyundai and Kia dominate in their back yard, high-end vehicles from Germany have made new inroads of late with offerings considered more diverse for consumers who are brand conscious.

BMW saw the largest jump during February with its sales close to doubling to 6,117 vehicles, showed industry data. That was just slightly behind that of Mercedes which led the rankings for imported cars with 6,192, which was up 12% from the same month one year ago.

Last year South Korea became the sixth largest market for Germany-based Mercedes, climbing up two spots from eighth.

The announcement by GM last month of its plans to shutter one of the four plants it has in South Korea and that it was considering the fate of its other three resulted in retail sales in South Korea nearly being cut in half during February to end the month at 5,804.

With the consumer worried over a loss of services after purchase, as well as the residual value, GM lost its spot that it held for a long time as the No. 3 automaker in South Korea, dropping to sixth.

The U.S.-based automaker, whose operations in South Korea are primarily focused on exports, is asking for financial help from the Seoul government along with concessions on wages and benefits from local unions to remain operating there.

On Wednesday, talks held with the local labor union were not able to produce any concrete results but some of the more than 2.500 workers have applied to receive a voluntary unemployment packages.

A spokesperson for GM Korea said the company hopes it can wrap talks up with the unions and that the government will move swiftly on the requests the company has made.

The spokesperson added that a drawn out restructuring would hurt the trust of the consumer.

Carmakers in the U.S. have been pressured by the White House to return operations to the U.S. since President Donald Trump took office. The situation of GM in South Korea is not only due to that but due to the increase in competition in the local market.