General Motors plans to open a new regional headquarters in South Korea this week, a move it says underscores its commitment to its local operations in the country.

The US automaker wants to reassure stakeholders of its local subsidiary, GM Korea, following its decision last year to spin off its local R&D operations from the manufacturing and distribution operations. Speculation has been mounting in recent months that General Motors is looking to exit the local market amid falling sales and ongoing struggles with militant unions.

The parent company was forced to recapitalise GM Korea last year following years of financial losses and weak domestic and export sales. The withdrawal and downsizing of the Chevrolet brand in numerous overseas markets has not helped. 

In May last year, GM Korea closed one of its four vehicle assembly plants, the 250,000 unit a year Gunsan facility, while its other plants continue to operate well below capacity.

Its domestic sales continued to fall sharply last year, by close to 30% to 93,317 units, despite the launch of a number of new products.

General Motors said its new Asia Pacific regional headquarters, located within the site of its main Bupyeong plant in Incheon, will be responsible for managing its production, sales, marketing and finances across the region except China. 

The opening ceremony will be attended by GM executive vice president Barry Engle, SVP Julian Blissett; managing director Andy Dunstan and GM Technical Center Korea CEO Roberto Rempel.