General Motors Co. (GM), the world’s second-largest automaker, announced plans to invest 8 trillion won ($7.3 billion) over five years to expand in South Korea, saying the market remains important to the company.
The GM Korea unit will boost manufacturing facilities and double the size of its design center this year making it the company’s third-largest after the U.S. and Brazil, the Detroit- based automaker said in a statement today.
“GM Korea will continue to play a major role in our global growth plans,” Tim Lee, GM international operations head, said in the statement. The investment “reinforces our commitment to GM Korea,” he said.
The automaker is increasing investment at the unit from 1 trillion won a year as it starts building new models to compete with a resurgent Toyota Motor Corp. (7203) The maker of the Prius regained the top spot in global sales from GM last year.
GM reported a third straight year of profit in 2012, led by sales in the U.S. and China, while losses in Europe more than doubled. The company is counting on Asia for growth outside the U.S. as it expects European demand will fall further this year.
GM vehicles produced in South Korea are exported to 150 markets on six continents, the company said in October. The South Korean operations have helped bolster GM’s product lineup in China and the rest of Asia with smaller cars such as the Cruze.
The investment in Asia comes as GM competes with Toyota City, Japan-based Toyota and Volkswagen AG (VOW) for the title of No. 1 global vehicle seller.
Toyota overtook GM last year to again become the best- selling automaker in the world. The U.S. automaker finished No. 2, outselling VW by more than 130,000 deliveries. The Wolfsburg, Germany-based automaker, aided by growth in Asia, aims to become the world’s biggest by 2018.
GM clung to its lead as the best-selling foreign automaker in China last year even as VW’s sales rose 24.5 percent to 2.81 million, which unlike GM includes Hong Kong in its tally. China sales of GM and its joint-venture partners rose 11 percent to a record 2.84 million last year compared to 2011.
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