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Sergio Rocha, chief executive officer of GM Korea Co., speaks during the media preview of the 2012 Busan International Motor Show in May. (Bloomberg) |
U.S. carmaker strives to find breakthrough amid sagging sales of Alpheon
GM Korea is seeking a breakthrough to boost the sluggish sales of its premium sedan Alpheon that debuted in the Korean market in 2010.
One scenario could be the introduction of the Cadillac brand, also under its parent U.S.-based General Motors, like the current Chevrolet series of which several models are being produced in Korea, industry sources said.
The Korean unit of GM had pinned hopes on the Alpheon in terms of sales competition with Hyundai Motor and Kia Motors’ premium sedans including the Genesis, Grandeur and the K7.
But GM Korea sold only 4,398 Alpheons for the first seven months of the year, posting a 36.7 percent fall compared with the same period last year.
The figure is in contrast to Hyundai-Kia’s sales performance. The affiliated carmakers sold 9,241 units of the K7, 10,977 units of the Genesis and 53,480 units of the Grandeur over the January-July period.
The sales of the Alpheon also lagged behind those of the BMW 520d.
Auto industry insiders picked low fuel-efficiency of the sedan. The Alpheon 3.0 has the fuel-efficiency of 9.3 kilometers per liter, while the Grandeur and the K7 have mileages of 11.6 kilometers per liter.
Insiders are raising the possibility that GM Korea may choose to manufacture the Cadillac premium sedans as a substitute.
While monthly average sales of the Alpheon were 1,472 units in 2010, the figure dropped to 858 units in 2011 and 628 units in 2012, a market observer said, citing sales data.
“In terms of brand image, it would be beneficial to GM Korea should the company push for marketing with the well-recognized Cadillac,” he said.
While a small number of the Cadillac sedans have been being sold via imports, a mass production in GM Korea’s local factories could be a breakthrough, according to observers.
GM Korea said it sold 60,720 units including the Alpheon and Chevrolet vehicles in July. Its domestic sales and exports dropped by 7.7 percent and 9 percent on-year, respectively.
Last year, GM Korea resolved to secure more than 10 percent of the local market on a yearly basis, unveiling its project to launch several models of the Chevrolet series.
GM Korea has also introduced a Cruze electric vehicle test fleet and the Volt as part of its commitment to the development of next-generation technology in coordination with U.S.-based GM.
Company executives said the image of Chevrolet, one of the world’s fastest-growing vehicle brands, has seen great improvement in Korea.
“According to a nationwide survey conducted by GM Korea, 98 percent of respondents were aware of Chevrolet and 55 percent would consider buying a Chevrolet vehicle,” a GM Korea executive said.
Meanwhile, GM Korea is considering reducing the number of senior employees by around 500 through an early retirement scheme.
Since GM Korea’s establishment in 2002, there has been one other time the company adopted a voluntary redundancy program, in 2009.
By Kim Yon-se (
kys@heraldcorp.com)
