PUSAN, South Korea -- General Motors' financial woes will not hamper its South Korean unit, the head of GM Daewoo Automotive & Technology Co. said on Wednesday.
A solid South Korean business is one of few bright spots for the world's largest auto maker, which is hemorrhaging money at its core North American operations.
Rating agency Moody's Investors Service recently cut GM's debt rating to "junk", citing sliding market share and uncertainty about a turnaround at the industrial icon that is battling legacy health care costs and intense competition from Asian carmakers such as Toyota Motor Corp. and Honda Motor Co..
"We are self-financing and we have credit lines if we need to grow on them," GM Daewoo CEO Nick Reilly told reporters.
GM Daewoo, which mainly produces sub-compact models such as the Matiz, Kalos and Lacetti, was created in 2002 when GM and partners took a majority stake in some of the assets of bankrupt Daewoo Motor. It is South Korea's third-biggest carmaker after Hyundai Motor Co. Ltd. and its Kia Motors Corp. affiliate.
"The problems in the United States are somewhat overblown and there's a plan to get out of the problems ... in the meantime it's not affecting us," Reilly told a news conference in Pusan to show off GM's hydrogen fuel-cell vehicle, which he drove to the briefing with Commerce Minister Lee Hee-beom.
GM said it has not yet decided whether to extend a cooperation pact with Toyota in research on fuel-cell vehicles. The current pact expires in March.
"There has been a very good relationship, we'll see how that develops in the future," George Hansen, director in charge of GM's fuel-cell commercialization in Asia Pacific, told Reuters. Most automakers view fuel-cell cars powered by hydrogen produced with renewable energy sources as the end-game in the race to develop fuel-efficient and less polluting cars. But many reckon the technology is still at least a decade away.
"We are planning and targeting to have fuel-cell technology developed by 2010," Hansen said, adding fuel-cell cars should by then be able to compete on performance with traditional cars.
GM would work with the South Korean government to win policy support for the new technology, including tax breaks on fuel-cell cars, as well as to promote their use, he said, adding similar efforts had made progress in Japan.
South Korea has to import all its crude oil and is the world's fourth-largest crude buyer, earning sizeable revenue from taxes imposed on oil and oil products.
Hyundai and Kia are also developing low-emission engines to meet increasingly tough environmental laws in overseas markets.
Robust exports helped GM Daewoo post record monthly sales of 112,631 vehicles in October, up 41 percent on a year earlier.