Layoff Fears in Korea as Chevrolet Gives Up on Europe

General Motors has decided to halt sales of Chevrolets in Europe from 2016 since there is no interest in the chunkily designed and unimpressively performing models. That means GM Korea, which manufactures 90 percent of the U.S. automaker’s cars sold in Europe including the Spark subcompact, Cruze compact and Orlando MPV, is expected to take a huge hit.

GM Korea built around 780,000 vehicles last year and exported 186,000 Chevrolets to Europe. If European sales stop, it stands to lose around 24 percent of its output over the next two years, threatening layoffs ahead.

GM said Thursday it would focus only on its successful Opel and Vauxhall brands in Europe. Both have a European history, with Vauxhall for many years being the brand name for the same cars sold in the U.K.

Chevrolet accounts for just a one-percent share of the European car market and will gradually decrease sales volume in the region by the end of 2015. But it will continue to sell the Chevrolet Corvette and Camaro sports cars and Cadillac sedans there.

GM owns around 30 Chevrolet dealerships in Europe, but despite spending a lot of money on promotions it failed to boost sales. Opel and Vauxhall, despite their slightly drab image, have maintained a market share of some six percent in the region. GM now plans to focus Chevrolet sales on Korea and Russia.

GM operates three factories in Korea. A GM Korea spokesman said the European subsidiary, which has been running losses in recent years, is managed by GM Korea so the halt in sales could reduce further losses. The spokesman added that the pullout of Europe will happen gradually and steps are being taken to minimize layoffs.

In Korea, GM Korea achieved record monthly sales in November and sold 133,187 cars from January to November this year while exporting 574,491. / Dec. 06, 2013 13:22 KST