GM Stock Plummets 1.26% as $700M Trading Volume Surges to 169th Rank Amid Tariffs and South Korean Production Struggles

Market Snapshot

General Motors (GM) closed 2025-11-03 with a 1.26% decline in its stock price, marking a negative performance despite a notable surge in trading activity. The company’s trading volume reached $0.70 billion, a 44.65% increase from the prior day, ranking 169th in volume among all listed stocks. This divergence between volume and price movement highlights investor uncertainty, potentially linked to ongoing operational challenges in its South Korean operations and broader industry dynamics.

Key Drivers

The primary factor behind GM’s stock decline centers on its struggling South Korean subsidiary, General Motors Korea (GM Korea). October sales for the unit fell 20.8% year-on-year to 50,021 units, driven by a 39.5% drop in domestic sales and a 20% decline in exports. This slump is attributed to a combination of U.S. tariffs and production disruptions. The Trump administration’s 25% tariffs on Korean-made vehicles, though recently reduced to 15%, have significantly burdened GM Korea, which relies heavily on U.S. exports. Domestic sales in South Korea accounted for just 3% of total sales in October, raising concerns about the unit’s long-term viability. Industry experts, including Daelim University professor Kim Pil-soo, warn that continued underperformance could fuel speculation about GM’s potential withdrawal from the market.

Compounding these issues, GM Korea faced production losses during a summer labor strike related to wage negotiations. The partial strike disrupted output of key models like the Chevrolet Trax and Trailblazer, which dominate the company’s export portfolio. While management emphasized strong global demand for Chevrolet vehicles—citing the Trax’s top ranking in South Korean passenger car exports year-to-date—these operational setbacks directly impacted October’s results. Gustavo Colossi, GM Korea’s vice president, acknowledged the third-quarter production challenges but remained optimistic about demand, a stance that contrasts with analysts’ caution.

Broader industry trends also influenced GM’s stock. The auto sector has navigated Trump-era tariffs more effectively than initially feared, with companies like Ford and Volkswagen adjusting cost estimates downward. GM itself reduced its projected tariff-related costs by $500 million in October. However, regulatory changes—such as the elimination of penalties for non-compliance with fuel efficiency standards—have disproportionately benefited competitors. For instance, Hyundai CEO José Muñoz highlighted the U.S. as the automaker’s most profitable market despite tariffs, a position GM Korea has struggled to replicate. The absence of regulatory penalties has allowed rivals to shift production toward more profitable SUVs and trucks, further straining GM Korea’s market share.

The interplay of these factors underscores GM Korea’s vulnerability. While the company has denied rumors of exiting South Korea, its reliance on U.S. exports—now subject to reduced but still burdensome tariffs—leaves it exposed to trade policy shifts. Additionally, the lack of a robust domestic sales strategy in South Korea, where GM Korea’s market share is minimal, limits its ability to diversify revenue streams. Analysts remain skeptical about the sustainability of the current business model, particularly as production costs rise and competition intensifies.

In summary, GM’s stock decline reflects a confluence of operational, geopolitical, and strategic challenges. The combination of tariffs, production disruptions, and regulatory headwinds has eroded investor confidence, despite the company’s efforts to highlight demand resilience. As GM Korea navigates these pressures, the market will likely remain watchful for signs of further deterioration or strategic adjustments to stabilize its position in the region.