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March 29, 2019

Tesla supplier buying GM Korea factory for EV contract manufacturing

A South Korean Tesla supplier will buy a closed car assembly factory from General Motors Korea and start contract manufacturing of electric vehicles, local media reports said.

By Olly Wehring

A South Korean Tesla supplier will buy a closed car assembly factory from General Motors Korea and start contract manufacturing of electric vehicles, local media reports said.

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The theory of the peak car – particularly in the triad markets of the US, West Europe and Japan – and the need for sustainable transportation have driven the pivot to mobility in the automotive industry. Both of these drivers are motivating OEMs to change, while society at large is interested in sustainable transport.    GlobalData’s forward-looking report provides you with insights into the direction that the automotive industry is heading in the next few years. It covers: 
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  • CASE megatrends, and their relationship with COVID-19 
  • The way forward for autonomous vehicles 
  • Sustainability issues in automotive 
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General Motors closed the Gunsan plant last May as part of a restructuring plan first announced in February which aimed to return its loss-making local subsidiary to profitability. The plant had been hit hard by GM's decision to withdraw Chevrolet from Europe and other global markets over the last few years. Capacity utilisation at the 260,000 unit/year facility, which made the Cruze compact car and the Orlando MPV, fell to around 20% in 2017.

According to Reuters, GM did not disclose the Gunsan sales price but car parts maker Myongshin said it would buy the land and buildings for KRW113bn won (US$99.5m)on 28 June.

The report, citing a statement from a provincial government, said Myongshin, also a Hyundai Motor supplier, is part of a consortium which would initially spend KRW200bn on the factory to produce 50,000 EVs starting in 2021 and 150,000 in 2025.

"We aim to close this deal as soon as possible to ensure that there will be ongoing economic activity," GM Korea said in a statement.

A Reuters source said the consortium was in talks with an unidentified global automaker to manufacture electric vehicles at the facility and added it was not Tesla.

The source added the plant could take advantage of South Korea's free trade deals with the US and Europe plus South Korea's electric car supply chain [it is a major source of batteries].

The electric car factory would create 900 jobs and another 2,000 at suppliers and other companies, the North Jeolla Province government statement cited by Reuters said.

Free Report
img

What's next for the Automotive industry?

The theory of the peak car – particularly in the triad markets of the US, West Europe and Japan – and the need for sustainable transportation have driven the pivot to mobility in the automotive industry. Both of these drivers are motivating OEMs to change, while society at large is interested in sustainable transport.    GlobalData’s forward-looking report provides you with insights into the direction that the automotive industry is heading in the next few years. It covers: 
  • The forces transitioning automotive to mobility services 
  • CASE megatrends, and their relationship with COVID-19 
  • The way forward for autonomous vehicles 
  • Sustainability issues in automotive 
Examine the factors contributing to the future growth of different segments of the automotive industry.   Download the full report to align your strategies for success and get ahead of the competition.  
by GlobalData
Enter your details here to receive your free Report.

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