At the press plant inside GM Korea's Bupyeong plant on the 25th. Héctor Villarreal, president of GM Korea, shared General Motors' (GM) large-scale investment plan from headquarters at a joint event with the union and said this. GM, which said in Dec. 2025 it would invest $300 million (about 450 billion won) in its Korea business sites, announced that day it would invest an additional $300 million.
As recently as 2018, eight years ago, GM Korea's fate was like "a lamp before the wind." As GM restructured its global operations by pulling out of Europe, India and South Africa, it also put its Korea business sites on the list for restructuring. The government and Korea Development Bank decided to inject 810 billion won in public funds, averting an exit, but the Gunsan plant, which had operated for more than 22 years, ultimately shut down.
When Korea Development Bank decided to provide funding at the time, it demanded that GM grant not only production but also development authority for sport utility vehicles (SUVs) and crossover utility vehicles (CUVs). Taking into account Korea's technology, rich human resources and supplier infrastructure—home to its own mass-market brands such as Hyundai Motor, Kia (formerly Kia Motors) and the former Daewoo Motor—GM gave GM Korea full development authority for small SUVs.
An official in the finished car industry said, "It would have been impossible for GM to promise Korea Development Bank to 'maintain R&D volume for 10 years, and strive to keep the production and R&D entities going even longer' if it had not recognized Korea's competitiveness." The Chevrolet Trax Crossover and Trailblazer, developed and produced by GM Korea, are now sweeping the North American market.
Mid-sized domestic automakers, including GM Korea, have overcome crises and rebounded, proving the strength of Korea's manufacturing. Analysts say decades of accumulated know-how in vehicle development, a solid parts supply chain and excellent quality control paid off.
◇ GM Korea, 3,000 engineers alone… parts supply chain also Korea's strength
GM Korea, which had posted losses for eight straight years from 2014 to 2021, turned profitable in 2022 and has posted net profits for three consecutive years, becoming GM's "cash cow." In particular, in 2024 it posted a net profit of 2.2077 trillion won, the highest ever.
In February, GM Chair Mary Barra singled out the Korea-produced models and said they "achieved great success." The Trax Crossover captured 27% of the U.S. small SUV market last year, ranking No. 1 among all models.
GM Korea's rebound, after being pushed to the brink of closure, owed much to its in-house development capability. Eight years ago, as GM headquarters kept its Korea business sites, it split product development and production organizations. GM Technical Center Korea, now the second-largest global engineering center within GM Group, was launched then as a dedicated product development organization.
The Trax Crossover and Trailblazer were created entirely at GM Technical Center Korea, from initial product planning to design and performance development. GM Korea threw its full weight behind the Trax Crossover and Trailblazer from 2020 to 2023. Investment solely for these vehicles' development and production line upgrades totaled $2.2 billion. Converted at the exchange rate at the time, that amounted to 3 trillion won.
A senior GM Korea official said, "We currently have 3,000 engineers alone," adding, "There are few places like Korea that have the capability to handle the entire process from design sketches to production and quality control."
Korea's solid parts supply chain is also cited as the driving force that enabled GM Korea to get back up. GM Korea has more than 1,600 tier-1 suppliers. Parts made with them total about $3.7 billion (about 5.6 trillion won) annually and are supplied to markets worldwide.
Kim Kyung-yu, senior research fellow at the Korea Institute for Industrial Economics & Trade (KIET), said, "There are very few countries where you can buy all automotive parts cheaply from nearby," adding, "GM concluded it could not pull its plants out of Korea precisely because of the Korean auto industry's strength—its solid parts supply chain."
◇ "The Busan plant ranks No. 1 in quality"… Renault and KGM go global
Renault Korea and KG Mobility (formerly SsangYong Motor), which also faced difficulties, are expanding their presence at home and abroad.
Renault Korea had lost visibility within the group after failing to launch a new model since rolling out the XM3, a small SUV, in 2020. But after persuading headquarters, it agreed to develop and produce three new SUVs in Korea, which has the technology and production capacity. That is how the "Aurora Project," meaning "dawn," was born.
In 2024, Renault Korea launched the first model of the Aurora Project, the mid-size SUV Grand Koleos. The vehicle has been a hit, with about 50,000 units sold over two years. The Pilante, a large mid-size coupe-style SUV released this year, is also sailing smoothly.
Quality control is cited as the reason Renault Korea was chosen as Renault Group's production base for mid- to large-sized cars. It reportedly gained credit for the stable supply, since 2021, of the Arkana, the European strategic model of the XM3.
A Renault Korea official said, "Headquarters evaluates production quality at Renault plants worldwide every year, and the Busan plant once ranked No. 1 and always places in the top three," adding, "In terms of quality, it is overwhelming."
KGM, which went through court receivership twice, is also rebounding, with exports last year rising 12.7% from a year earlier to 70,286 units. A KGM official said, "We had accumulated know-how from developing everything ourselves from A to Z over decades," adding, "The desperation of employees who endured wage givebacks and welfare cuts to secure development funds was also a driving force that enabled us to get back up."
The main models driving KGM's rebound are the mid-size SUV Torres, the coupe-style SUV Actyon and the mid-size pickup truck Musso. Being recognized as a "prestigious house of SUVs" since the SsangYong era and long accumulating competitiveness mainly in SUV development and production laid the groundwork for the new models to gain a firm footing in the global market.
KGM has teamed up with BYD, China's largest electric vehicle maker, to procure EV batteries while jointly developing a hybrid system. Chery Automobile Co. of China, which has technologies such as high-performance hybrids and the EV-dedicated T2X platform, has also joined KGM to develop next-generation eco-friendly vehicles and SUVs.
A finished car industry official assessed, "The reason KGM signed partnerships with well-known Chinese EV makers is that, based on its long experience in SUV development and production, it has sufficient competitiveness in design and performance."
Actively knocking on the doors of overseas markets even in tough times is also cited as a reason for KGM's rebound. After going through corporate workouts twice, KGM filled the vacancies of departed employees with seasoned sales hands who had worked at Hyundai Motor and others, and is targeting new markets such as Türkiye and the Middle East. A representative example is Hwang Ki-young, KGM executive vice president and CEO, who served as head of Hyundai Motor's Russia and U.K. subsidiaries.
◇ Three mid-sized firms put out the immediate fire… need to secure cost competitiveness
With the three mid-sized firms having escaped crisis, voices in the auto industry say they now need to accelerate preparations for the future. Cutting production costs is the top priority. The United States, Korea's largest auto export destination, has begun imposing a 15% tariff on Korean-made cars, and in other markets they must compete with Chinese automakers.
Senior research fellow Kim said, "To respond to tariffs and China, we must lower domestic production expenses," adding, "The three mid-sized firms must secure cost competitiveness through smart manufacturing." Lee Hang-gu, research fellow at the Korea Automotive Technology Institute, said, "There is a need to reform the high-wage structure," adding, "Given that the environment has never been this difficult and complex, companies and unions should have frank talks and each yield a little."
There are also calls to secure future technologies such as EVs. Except for Renault Korea, which is preparing an EV as the third model of the Aurora Project, both GM Korea and KGM have their main models skewed toward internal combustion engines. In KGM's case, it has teamed up with Chinese companies such as BYD and Chery for its eco-friendly vehicle business, but many argue that, in the long term, it needs to invest more in its own technological capabilities to stand on its own.
Senior research fellow Kim said, "In the case of the three mid-sized firms, they still are not independently preparing for the future with EVs and the like, so it is hard to say they are fully stabilized."