General Motors leaves Australia, New Zealand and Thailand
General Motors Co said it will wind down its operations in Australia and New Zealand and sell the plant in Thailand in the latest restructuring of its global business, costing the American automaker $ 1.1 billion..
These moves will accelerate GM’s exit from unprofitable markets, making it more dependent on demand in the United States, China, Latin America and South Korea..
The company told analysts that restructuring GM’s international operations outside of China to generate profit margins would bring «$ 2 billion improvement» in two years.
GM predicts fixed income in 2020 after challenging 2019 and faces skyrocketing interest in electric vehicles produced by Tesla Inc.
GM «focuses on markets where we have the right strategies to generate consistent profits and prioritize global investments that will drive future growth», especially in electric and self-driving vehicles, said GM Chairman and CEO Mary Barra.
The latest change – the phasing out of GM in Asia, which began in 2015 with the announcement of the end of production of GM-branded cars in Indonesia – will help save $ 1.1 billion. Around 600 jobs to be cut in Australia and New Zealand, shutdowns in Thailand will lay off 1,500 employees.
Since taking office in 2014, Barra has prioritized profit over sales and global presence.
In 2017, GM Opel and Vauxhall’s European operations were sold to Peugeot SA, GM withdrew from South Africa and other African markets. Since then, Barra has decided to withdraw GM from Vietnam, Indonesia and India..
Like the UK, Australia and New Zealand are right-hand drive markets. GM President Mark Reuss says the company has failed to justify its investment in continued production of right-hand drive vehicles due to the sharp drop in Australian GM Holden brand sales in Australia..
In the wake of steadily declining new car sales, GM said it would end production at its Australian plant in 2017, and last year named the Commodore a former bestseller as part of a move to smaller SUVs and trucks..
Great Wall, one of China’s largest sports utility vehicle manufacturers, has said it will sell Thai-made vehicles. The company also has an engine plant in Southeast Asia and Australia, and is building global sales amid a slowing domestic market..
«We have no choice, if we do not enter the global market, we will not survive», – said last year Wei Jianjun, chairman of the Baoding automaker, when Great Wall opened a plant in Russia.
In January, he also signed an agreement to buy GM’s auto plant in India. Thai deal expected to be completed by the end of 2020.
«Such an acquisition could give Great Wall quick access to the ASEAN market, and Thailand is a good choice for its manufacturing base amid the country‘s established auto supply chain.», – said Shi Ji, analyst at Haitong International.
The Great Wall is likely to face stiff competition from Japanese automakers, which dominate Thailand’s domestic auto market. Thailand produces about 2 million vehicles per year, with more than half being exported.
Great Wall may also consider building pickups and SUVs in Thailand, a source familiar with the matter told Reuters..
The firm, which is building a car plant with BMW in China, sold 1.06 million vehicles last year, including 65,175 units for export.