GM Korea Company, the South Korean subsidiary of US automaker General Motors (GM), is reportedly planning to shut down its in-house aftermarket service operations in the country by early next year. This decision is part of a broader cost-cutting program aimed at improving the company’s financial performance in a challenging market environment.
According to local media reports, GM Korea will stop accepting service appointments at its nine remaining directly managed service centers from December. The transfer of all service activities to its independent service partners is expected to be completed by February of next year. The company currently has around 380 partner-run service centers across South Korea, which will continue to operate as normal.
GM Korea has been facing significant challenges in the South Korean market, with domestic sales plunging by 39% to 12,979 units in the first ten months of 2025. The company is struggling to compete with domestic automakers Hyundai Motor and Kia Corporation, as well as a growing number of import brands.
The company’s exports have also been impacted by the imposition of import tariffs in the US. GM Korea produced almost 500,000 vehicles last year, with over 80% of output exported to the US. However, exports declined by 6% to 353,032 vehicles in the first ten months of 2025, with around 85% of these shipments destined for the US.
GM Korea’s manufacturing operations are at risk of closure if exports to the US lose their competitiveness. The company has been reassessing its operations in South Korea since the second quarter of 2025, anticipating the impact of US import duties on its earnings. Some local analysts speculate that the decision to close down the in-house service network may be the beginning of GM’s exit strategy from South Korea.
While the US government recently agreed to lower its duties on South Korean imports from 25% to 15%, the import tariff remains a significant additional cost affecting the competitiveness of GM Korea’s exports to the US. This is a new challenge that was not present in the previous year.
In conclusion, GM Korea’s decision to close its in-house service operations in South Korea reflects the company’s efforts to streamline its operations and improve its financial performance in a challenging market environment. The impact of US import tariffs on the company’s exports underscores the need for strategic adjustments to maintain competitiveness in the global automotive industry.
This article was originally published by Just Auto, a GlobalData-owned brand.
