General Motors (GM) revealed shocking news today that it would withdraw from the Thailand market by the end of 2020. This includes the selling of its manufacturing plant in Rayong, Thailand, as well as the end of its vehicle sales operations in the Thai market.
This comes at a time when the American automaker is undergoing major changes in its global operations. GM says in its press statement that it is “building on the comprehensive strategy it laid out in 2015 to strengthen its core business, drive significant cost efficiencies and take action in markets that cannot earn an adequate return for its shareholders.”
“I’ve often said that we will do the right thing, even when it’s hard, and this is one of those times,” said GM Chairman and CEO Mary Barra. “We are restructuring our international operations, focusing on markets where we have the right strategies to drive robust returns, and prioritizing global investments that will drive growth in the future of mobility, especially in the areas of EVs and AVs.
The automaker says that “low plant utilization and forecast volumes have made continued GM production at the site unsustainable. Without domestic manufacturing, Chevrolet is unable to compete in Thailand’s new-vehicle market.”
With that said, Chevrolet Thailand’s operations will not end abruptly, as it will still continue vehicle sales until the end of this year. At the same time, GM also announced that it has signed a binding term with Chinese automaker Great Wall for the sale of its manufacturing plant in Rayong, Thailand.
“While these actions support our global strategy, we understand that they impact people who have contributed so much to our company. We will support our people, our customers, and our partners, to ensure an orderly and respectful transition in the impacted markets.”
This news becomes particularly interesting for markets such as the Philippines wherein the Thai-made Colorado and Trailblazer are sold. Chevrolet Philippines, which is distributed by The Covenant Car Company, Inc. (TCCCI), sources its vehicles from numerous other countries as well, such as China for the Sail, and United States for the Suburban, Corvette, and Camaro.
GM’s restructuring plants are not just limited to Thailand. The American automaker also announced that it will wind down sales, design and engineering operations in Australia and New Zealand along with retiring the Holden brand by 2021.
GM President Mark Reuss said the company explored a range of options to continue Holden operations, but none could overcome the challenges of the investments needed for the highly fragmented right-hand-drive (RHD) market, the economics to support growing the brand, and delivering an appropriate return on investment.
“At the highest levels of our company we have the deepest respect for Holden’s heritage and contribution to our company and to the countries of Australia and New Zealand,” said Reuss.
“After considering many possible options – and putting aside our personal desires to accommodate the people and the market – we came to the conclusion that we could not prioritize further investment over all other considerations we have in a rapidly changing global industry.
With GM scaling down its operations on Australia and New Zealand, the company announced that it will focus instead on its specialty vehicle business in these two markets.
“We do believe we have an opportunity to profitably grow the specialty vehicle business and plan to work with our partner to do that,” he concluded.