GM Decides Against Building New Chevrolet Aveo In South Korea
News: US automaker General Motors (GM) has told a South Korean trade union that the next-generation Chevrolet Aveo small car will not be made in the country, Automotive News reports. South Korea is a key Asian base for GM, but the automaker has opted to make the cars in China and the US instead, prompting the union to threaten industrial action. However, GM has promised that South Korea would be allowed to produce the model two years after the Aveo is launched. Currently, GM and its South Korean local workforce, who produce 40% of Chevrolet's models, remain locked in negotiations regarding wages.
BMI View: According to the Korea Automobile Manufacturers Association (KAMA), domestic vehicle sales for the first four months of 2013 came in at 443,203 units, down 1.5% y-o-y. While this plays out our bearish outlook nicely, we are slightly upgrading our forecast to take into account strong commercial vehicle sales in the first few months of the year. We are revising our vehicle sales forecast for this year slightly upwards to -1.2%, to 1.39mn units, from -1.9% previously.