General Motors may consider shipping more Chevrolet-brand cars produced at Korean factories to Australia, as it will end vehicle and engine manufacturing on the island continent by the end of 2017.

“The carmaker is evaluating the merits of shipping the cars from Korea. But no decisions seem to have been made yet,” said an industry source who declined to be named.

The Detroit-based carmaker announced on Tuesday that its Holden unit in Australia will cease production in 2017, citing negative business conditions, including the strong Australian dollar, high cost of production and slowing sales.

While Holden will remain as a sales company, industry watchers say the pullout plan could offer a fresh opportunity for Korean factories hit hard by GM’s recent shake-up in Europe.

Last week, GM announced that it will abandon the Chevy brand in Europe from 2016, which indicates an annual 15 to 20 percent output cut for the Korean unit. GM Korea produces 90 percent of the GM cars, or about 187,000 vehicles, that are sold in Europe annually.

In the Australian car market of about 1.11 million unit sales per year, Toyota Motor is the No. 1 player with a 20 percent share, while Holden, the No. 2, claims 10.3 percent. Of the total 110,000 GM cars sold last year, GM Korea shipped some 34,000 vehicles to the market.

GM is also expected to benefit from the recent free trade agreement between Korea and Australia, which calls for immediate removal of the 5 percent tariffs on gasoline-powered vehicles.

But the company is said to be cautious about its future sales plan there.

“If GM ceases production in Australia, it would negatively affect the brand awareness of Chevy cars and sales overall. Then there would be no clear benefits for GM and the Korean unit,” said the source.

A GM Korea spokesperson said the company was discussing ways to respond to the planned Chevy pullout from Europe but declined to comment on whether the closure in Australia could lead to more exports to the country from Korea.

By Lee Ji-yoon (jylee@heraldcorp.com)