Originally Posted by
PaulTan.org | 17 February 2020 3:11 pm
GM’s co-ordinated retreat is part of the company’s plan to exit unprofitable markets including Europe, while focusing on North America, China, Latin America and South Korea. With the planned sale of its Thai plant, GM has essentially given up on the rest of ASEAN as well, as the Land of Smiles is the company’s regional hub.
GM is “focusing on markets where we have the right strategies to drive robust returns, and prioritising global investments that will drive growth in the future of mobility,” especially in electric and autonomous vehicles, GM chairman and CEO Mary Barra said in a statement. “I’ve often said that we will do the right thing, even when it’s hard, and this is one of those times,” she added.
Since taking over the hot seat in 2014, Barra has prioritised profit margins over sales volume and a global presence. In 2017, GM sold its Opel/Vauxhall European arm to Peugeot and exited South Africa and other African markets. Subsequently, Barra made the call to pull out of Vietnam, Indonesia and India. In 2015, GM killed off the Chevrolet brand in Europe and left the Russian market.
“Our decision to cease production at the Rayong site is based on GM’s global strategy and optimisation of our manufacturing footprint around the world. In this context, sale of the Rayong plants to GWM is best option to support future vehicle manufacturing at this site,” said GM’s international operations senior VP Julian Blissett.
GM’s strategic markets, alliances and distributors president Andy Dunstan said GM had undertaken a detailed analysis of the business case to allocate a new vehicle program to Rayong. However, low plant utilisation, forecast domestic and export volumes impacted the business case significantly.
“GM explored a range of options to maintain Chevrolet in Thailand’s new vehicle sales market. Regrettably, without a domestic manufacturing footprint, it is not viable for Chevrolet to compete in the Thai market,” he added.
There are similarities with the geopolitical situation in Asia. As the Americans retreat, the Chinese are expanding their presence in the region. GWM, one of China’s biggest SUV makers and owner of the Haval brand, said that it will sell vehicles from the Thai plant across the region and Australia, essentially picking up where GM left off. China’s previously red hot auto market has slowed, and its car companies are now looking abroad for growth.