GM Korea to spend $5bn on three year expansion

SEOUL: The South Korean unit of US auto giant GM said Wednesday it would spend up to 5.4 trillion won ($5 billion) over the next three years to expand its market share.

The investment includes the cost of developing new vehicles as well as expanding and improving the company's service centres, GM Korea vice president Ankush Arora said.

"You certainly need great products, but the formula of success is a combination of many factors," he told Yonhap news agency.

The company turned profitable in 2010 after posting net losses for the previous two years. However, its domestic market share was around eight percent last year.

Arora said the company's market share would "for sure" reach a double-digits this year for the first time.

It plans to renovate its 10 major service centres by October with various "comfort zones" that will enable customers to take naps, read books or use portable computers.

"Our intent is very clear that we want to understand and give to our customers something that they have not experienced before," Arora said.

The same changes will be seen at all smaller GM service centres within the next 14 months, he said.

Since GM Korea dropped the name of former associate Daewoo in January, it has provided all vehicle consumables such as engine oil for free for three years after the purchase of cars.

It has also offered a five-year, 100,000-kilometre warranty on major parts and seven years free roadside assistance.

Total sales in the first five months of this year rose 11.5 percent from a year earlier to 333,979 units. Of this, domestic sales increased 15.8 percent to 55,310.

Copyright AFP (Agence France-Presse), 2011