German automakers gain ground in South Korea, outselling GM for first time

SEOUL (Reuters) - Mercedes and BMW both sold more cars in South Korea than General Motors for the first time last month, helped by the growing popularity of German premium brands and as consumers shied away from GM after it announced a major restructuring.

While home-grown automakers Hyundai Motor and Kia Motors Corp dominate the local market, high-end German vehicles have made inroads in recent years with more diverse offerings for brand-conscious consumers.

BMW saw the biggest jump with February sales nearly doubling to 6,118 vehicles, industry data showed. That was just a tad behind Mercedes which led the imported car rankings with 6,192 cars, up 12 percent from the same period a year earlier.

South Korea last year became the sixth biggest market for Mercedes, climbing from eighth place.

GM's announcement last month that it plans to shut down of one of its four factories in South Korea and was weighing the fate of the three other plants resulted in domestic retail sales nearly halving in February to 5,804.

With consumers worried about loss of after-care services and residual value, GM lost its long-held spot as South Korea's No. 3 automaker, slipping to sixth place.

The U.S automaker, whose South Korean operations are primarily geared towards exports, is seeking financial aid from Seoul as well as concessions on wages and benefits from its local union to stay operating in the country.

Talks with the labour union on Wednesday failed to produce concrete results although some 2,500 workers have applied for voluntary redundancy package.

"We hope to wrap up talks with the labour union and the government swiftly," a GM Korea spokesman said.

"A drawn-out restructuring will hurt consumer trust," he added.

($1 = 1,068.9000 won)

(Reporting by Hyunjoo Jin; Additional reporting by Haejin Choi; Editing by Edwina Gibbs)