GM Korea to cut production from next week

GM Korea's Bupyeong plant in Incheon, west of Seoul. (Yonhap)

GM Korea Co., the South Korean unit of General Motors Co., said Thursday it will cut vehicle production by half at one of its three plants from next week due to a lack of semiconductor chips.

GM Korea's planned output reduction is in line with US parent GM's decision to cut production at its local and overseas plants.

GM Korea said it will take down production at the No. 2 Bupyeong plant, just west of Seoul, to half capacity from Monday.

"We are working closely with our supply base to find solutions for our suppliers' semiconductor requirements and to mitigate impacts on GM and GM Korea. We are currently assessing the overall impact, but our focus is to keep producing our most in-demand products including SUVs for our customers," GM said in a statement.

GM Korea did not say how long the output reduction would last and didn't disclose how much production losses it expects from it.

The Detroit carmaker has three Korean plants -- two in Bupyeong and one in Changwon -- whose combined output capacity reaches 630,000 units a year.

The No. 2 Bupyeong plant produces the Trax compact SUV and the Malibu midsize sedan.

"Due to the fluidity around the availability of (chip) parts, our current plan is to update the plants every week on the following week's production schedule. Our intent is to make up as much production lost at Bupyeong 2 plant as possible," the statement said.

For the whole of 2020, GM Korea sold 368,453 vehicles, down 12 percent from 417,226 units a year earlier, amid the COVID-19 pandemic.

GM owns a 76 percent stake in GM Korea, and the state-run Korea Development Bank and SAIC Motor Corp. hold a 17 percent stake and 6 percent stake, respectively, in the Korean unit. (Yonhap)