M said to consider more South Korean exports to Australia after Chevy shake-up

[jpd80]

Automotive News - subscription requierd
December 6, 2013 - 10:40 am ET
SEOUL/SYDNEY (Reuters) -- General Motors may consider shipping more South Korean-made cars to Australia,
a source told Reuters today, as part of a global restructuring that will see its Chevrolet brand in Europe dropped
and production in Australia potentially scrapped.

GM, which has been mulling its future in Australia for months, has decided to pull out as early as 2016,
Australian media reported today.

One option that would be looked at us supplying Australia using factories in South Korea affected by
GM’s announcement on Thursday that it will drop the Chevrolet brand in Europe by the end of 2015.

GM Korea shipped 187,000 Chevy cars to Europe last year but the brand has failed to gain significant
share in the market.

"GM Korea could consider exporting Korean-made cars such as the Cruze compact to Australia if
it were to shut down a plant there," the source, who asked not to be identified because of
the sensitivity of the matter, told Reuters.

GM Korea has not started discussions on the plan yet, the source added.

GM Korea last year exported about 30,000 vehicles including Barina/Aveo subcompact and Captiva SUVs
to Australia, where they are sold under the Holden badge.

Such a move might face a backlash in Australia, where there are widespread concerns that any exit
by GM Holden will be followed by Toyota, causing a collapse of the entire domestic industry.

"When Holden pulls out of this country, it will be a domino effect," said opposition Sen. John Madigan,
whose state of Victoria is the one of the major centers for Australia's auto industry.

"Already car component manufacturers have lost critical mass with the decision of Ford to pull out
of Australia. If another one pulls out, that's the end, then we're going to be hearing about Toyota --
there are going to be tens of thousands of jobs lost."

A spokeswoman for Toyota Australia, which has previously said it expects to make to a decision on
its manufacturing future in the country in 2014, declined to comment.

Australian production under pressure

Citing unnamed senior government sources, the Australian Broadcasting Corp. said GM had been expected
to make an announcement on its plans to quit Australia this week but had put it off until early next year.

A GM spokesman in Detroit declined to comment on the reports, while Holden said its discussions with the
government were ongoing. Australia's Industry Minister Ian Macfarlane said no decision had been made.

Holden, which traces its roots in Australia to a saddle maker in 1856, makes vehicles at its Elizabeth plant
in South Australia and engines in Port Melbourne, Victoria, employing almost 4,000 people and producing
around 95,000 vehicles a year.

Australia's auto industry has been under pressure for years as high costs, a strong local dollar, weak exports
and tough international competition take a toll.

In May, Ford announced it would shut its two Australian auto plants in October 2016, following
the exit of Mitsubishi in 2008.

The industry has been propped up by billions of dollars in government support, which has
become less certain since Prime Minister Tony Abbott's conservative coalition won power in September.

"The message we are getting from Holden is they are in two minds and I would like them to clarify
what their position is," Abbott told local radio today. "There is not going to be any extra money over
and above the generous support taxpayers have been giving for some time," he added.

Adding to the pressure on the industry, Australia on Thursday signed a free trade deal with South Korea,
cutting tariffs on imports of cars and car parts.

"You've got to look at the relative size of the industry. Korea pumped out 4.5 million vehicles last year -- we did 221,000 --
so you can imagine the size of their supply chain," Richard Reilly, the chief executive of Federation of Automotive
Products Manufacturers said. "They are going to be getting better access to our market going forward."

Ian Park, an analyst at IHS Automotive, said he expected GM Korea to seek to export more cars
to Australia after Chevy is withdrawn from Europe, boosted by the trade deal.

GM Korea said in a statement that "the phase-out of Chevrolet in Western and Eastern Europe will
increase focus on driving profitability, managing costs and maximizing sales opportunities in Korea."
Even before the FTA, vehicles were Australia's second-largest import from South Korea, worth
more than A$2 billion last year.

Morgan Stanley analyst Adam Jonas also said the trade deal could offer opportunities in Australia
for GM's Korean-made cars. "It also serves to put a little pressure on the Koreans. The costs in
Korea are rising. The labor environment is not the friendliest in the world," he told Reuters.

Read more: http://www.autonews.com/article/2013...#ixzz2mjgyJb3A
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[Dr Smith]

As recent history has shown our regional neighbours have grown their industrial base building new factories with all the modern manufacturing processes. Add all their cheap labour and combined with big domestic markets as a starting base eventually exports were their next target and we come to now - we import massive numbers from Thailand and Korea. It was inevitable a country like ours with a small domestic market would eventually struggle to compete in manufacturing because our higher cost and standard of living meant we would not be competitive. Our local economy doesn't give us enough scale when you have the same manufacturing ability in far more populace neighbouring countries. Plus our shores are more open then any other country in the world to imports. Even Korea had an 8% import duty ( will be dropped due to FTA) compared o our 5%, not a big difference but other countries have far greater.

I find the last paragraph from jpd80's post really interesting

Morgan Stanley analyst Adam Jonas also said the trade deal could offer opportunities in Australia
for GM's Korean-made cars. "It also serves to put a little pressure on the Koreans. The costs in
Korea are rising. The labor environment is not the friendliest in the world," he told Reuters.

Large corporates can keep chasing cheap labour around the world but what happens when that labour is no longer cheap or is unstable.... where do they go! I remember a ship building doco on Foxtel about Korea, their workers were paid upto $80K per year which was more then similar American ship builders and destroyed a fallacy of cheap labour in S. Korea. They just build more ships then others and can work on lower margins as the volume of ships built was high enough. Wonder what would happen if that environment changed.

[mik]

No surprises here.

[csv8]

Here comes : HYUNDAI EQUUS...GENESIS. V6 V8. KIA FORTE...CADENZA..K900(think Fairlane)
The motoring landscape will be very different after 2016..

[Gothefalcon]

Originally Posted by csv8

The motoring landscape will be very different after 2016..

Not in My driveway !......

[csv8]

KIA K 900

No one thinks it's strange for this company that once sold us the Sephia to compete head-to-head with the best luxury brands in the world.

As for the car itself, it does indeed have handsome styling. Kia's design language wears nicely on the K900's larger frame. The large, 19-inch, multi-spoke wheels keep that big body from looking disproportionate, and the all-LED headlights give the front end a suitably high-tech appearance that's required in this class of overachievers.

As we've mentioned about the K900, it's built on the same platform as the Hyundai Genesis and Equus and borrows a little bit from both. It shares some exterior dimensions with the Equus, including wheelbase and the width of its front and rear tracks, while offering your choice of a V6 or V8 engine like the Genesis. Aside from that, you can't touch or see anything that would suggest the K900 is kin to a Hyundai.

The engines available, however, are familiar and include the Tau 5.0-liter V8 and 3.8-liter V6 that both Korean automakers share. This is the first time anything wearing a Kia badge has offered eight cylinders, and it makes quite an entrance producing 420 horsepower. The 3.8-liter V6, meanwhile, produces 311 hp, and both engines are mated to an eight-speed automatic transmission.

With an opulent interior and all of the infotainment, connectivity and safety technology this class of fullsize luxury sedans requires, the K900 looks like a natural next step for Kia. We'll be getting behind the wheel of one soon to judge how it all comes together, and pricing information should arrive closer to the time it goes on sale in the first quarter of next year.
http://www.autoblog.com/2013/11/21/2...-k900-la-2013/

[Gothefalcon]

Originally Posted by csv8

KIA K 900
it goes on sale in the first quarter of next year.

It wont sell here... aparently Aussies don't like big 6 & 8 Cyl sedans anymore.... or so our car industry & Govco keep telling us !??

[Nikked]

Originally Posted by Gothefalcon

It wont sell here... aparently Aussies don't like big 6 & 8 Cyl sedans anymore.... or so our car industry & Govco keep telling us !??

They don't, that's why they aren't selling over 100 000 a year like they did 20years ago.

[EDManual]

what will we export to South Korea to make it a fair deal?

[csv8]

Originally Posted by EDManual

what will we export to South Korea to make it a fair deal?

Asylum seekers !!!!

[nstg8a]

Originally Posted by EDManual

what will we export to South Korea to make it a fair deal?

Grains crops meat etc etc.


I like the look of the v8 Kia...

[mik]

Originally Posted by EDManual

what will we export to South Korea to make it a fair deal?

Our $$$$$$$$$$$

[Bossxr8]

Originally Posted by Dr Smith

As recent history has shown our regional neighbours have grown their industrial base building new factories with all the modern manufacturing processes. Add all their cheap labour and combined with big domestic markets as a starting base eventually exports were their next target and we come to now - we import massive numbers from Thailand and Korea. It was inevitable a country like ours with a small domestic market would eventually struggle to compete in manufacturing because our higher cost and standard of living meant we would not be competitive. Our local economy doesn't give us enough scale when you have the same manufacturing ability in far more populace neighbouring countries. Plus our shores are more open then any other country in the world to imports. Even Korea had an 8% import duty ( will be dropped due to FTA) compared o our 5%, not a big difference but other countries have far greater.

I find the last paragraph from jpd80's post really interesting


Large corporates can keep chasing cheap labour around the world but what happens when that labour is no longer cheap or is unstable.... where do they go! I remember a ship building doco on Foxtel about Korea, their workers were paid upto $80K per year which was more then similar American ship builders and destroyed a fallacy of cheap labour in S. Korea. They just build more ships then others and can work on lower margins as the volume of ships built was high enough. Wonder what would happen if that environment changed.

I think you will find South Korea's wages are similar to ours, and they are extremely militant too. They will strike at the drop of a hat. They are not a low cost country like Thailand or India.

Originally Posted by EDManual

what will we export to South Korea to make it a fair deal?

Our dignity.

[nstg8a]

Theres still a sizeable market for big boofy v8 sedans, its just not big enough to support local manufacturing

[Nikked]

"big boofy Korean V8"

[jpd80]

Originally Posted by Nikked

"big boofy Korean V8"

Do Bogans become Kogans?

[danzvtil]

Originally Posted by jpd80

Do Bogans become Kogans?

LOL GOLD! Korean cars will now wear Aussie Pride and Southern cross stickers no doubt, driven by Shazzas and Dazzas with their brood of Jaxxons,Jetts and Makaylahhs.

[stevz]

Originally Posted by danzvtil

LOL GOLD! Korean cars will now wear Aussie Pride and Southern cross stickers no doubt, driven by Shazzas and Dazzas with their brood of Jaxxons,Jetts and Makaylahhs.

A bit like on Australia day when people proudly attach an Aussie flag on their Kia/Hyundai/Mazda pos. When I see people like that I feel like grabbing that flag and ramming it down their throats.

[bobthebilda]

Originally Posted by stevz

A bit like on Australia day when people proudly attach an Aussie flag on their Kia/Hyundai/Mazda pos. When I see people like that I feel like grabbing that flag and ramming it down their throats.

But instead you get your chinese made flag and perform some other violent activity?

You feel anger when you see someone driving around in an imported car with an aussie flag attached

[Nikked]

Originally Posted by danzvtil

LOL GOLD! Korean cars will now wear Aussie Pride and Southern cross stickers no doubt, driven by Shazzas and Dazzas with their brood of Jaxxons,Jetts and Makaylahhs.

They already do...have done for ages. Nothing is more Australian then a southern cross sticker on a hilux.

[eb2fairmont]

Nah the next bogan car of choice will be the Mazda 3.

[Nikked]

So one can only be patriotic if they own an aussie car?