American auto producer General Motors Co’s South Korean unit, GM Korea Co, has decided to cut auto production by 50pc from February 8 at No. 2 Bupyeong plant located in Incheon, as per media reports citing a statement by the company. The planned output reduction is due to the shortage of semiconductor chips across the globe.
The company produces Chevrolet Malibu and Trax at the plant. It said that it will monitor the supply of semiconductor chips every week to confirm the production plan for the coming weeks.
The company’s total sales are expected to take a hit by the reduction in the plant’s output as the Trax model is responsible for nearly 85pc of its shipments bound for overseas markets.
The company’s other two plants in South Korea – No. 1 Bupyeong plant and the Changwon plant that manufacture its popular Chevrolet Trailblazer SUV – will continue production as usual.
In 2020, the company’s total sales stood at 368,453 units, down by 12pc as compared to 417,226 units sold in 2019.
GM holds a 76pc stake in GM Korea, while state-owned Korea Development Bank and SAIC Motor Corp hold a 17pc stake and 6pc stake, respectively.
Several auto manufacturers, including Volkswagen AG, Ford Motor Co, Subaru Corp, Toyota Motor Corp, Nissan Motor Co, and Stellantis NV, have cut vehicle production due to a shortage of semiconductor chips across the globe.
The global auto output is estimated to lose 672,000 units in the first three months and 964,000 units for the whole year in 2021, as per IHS Markit.