General Motors To Sell Closed Car Factory In South Korea

General Motors Company (NYSE:GM) is set to sell its closed car factory in the southwestern city of Gunsan, South Korea to a South Korean auto supplier Myoungshin for 113 billion won ($99.5 million), per Reuters. Myoungshin, a unit of MS Autotech, affirmed that it will buy the land and buildings of the General Motors facility to undertake contract manufacturing of electric vehicles (EVs).

Notably, General Motors closed one of its four South Korean plants in late May and axed several workers. This move, which was in sync with the automaker’s strategy to restructure its operations, eventually gained huge financial support from the South Korean government.

According to a provincial government release, Myongshin is part of a consortium, which, to start with, would invest a sum of 200 billion won on the factory. The plant will produce 50,000 EVs starting 2021 and 150,000 EVs in 2025.

Moreover, according to a statement by North Jeolla Province government, the electric car factory would create 900 jobs, and another 2,000 at suppliers and other firms. South Korea’s electric car supply chain and free trade deal with the United States and Europe will be favorable for the operation of the plant.

In the past six months, shares of General Motors have outperformed the industry it belongs to. The stock has gained 11.4% against the industry’s fall of 1.4% in the said period.



Zacks Rank and Other Stocks to Consider

General Motors currently has a Zacks Rank #2 (Buy).

Other top-ranked stocks in the auto space include Ferrari N.V. (NYSE:RACE) , Oshkosh Corp. (NYSE:OSK) and Fox Factory Holding Corp. (NASDAQ:FOXF) . While Ferrari currently sports a Zacks Rank #1 (Strong Buy), both Oshkosh and Fox Factory Holding carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Ferrari has an expected long-term growth rate of 18.5%. Shares of the company have gained 35.6% over the past three months.

Oshkosh’s long-term growth rate is projected at 11.3%. Over the past three months, shares of the company have gained 22%.

Fox Factory has an expected long-term growth rate of 15.1%. Over the past three months, shares of the company have risen 22.6%.

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