Reportedly, the US car maker, General Motors (GM) is selling manufacturing facilities in Rayong under a purchase agreement with Chinese car maker Great Wall Motors. With both parties wanting to close the deal within this year, the sales and operations at the plant might be stopped, impacting roughly 1,900 jobs, including 1,200 at its Rayong plant.
“Roughly 90 percent of Chevrolet sales in Southeast Asia come from two Thai-made vehicles, the Colorado pickup and Trailblazer sport-utility vehicle [SUV]. When GM ends all operations in this region, sales of those vehicles will cease as well,” said Titikorn Lertsirirungsun, Manager for Southeast Asia at research firm LMC Automotive.
It was in January 2000 that GM entered Thailand and later established two manufacturing lines at Rayong's WHA Eastern Seaboard Industrial Estate. Why the US car maker has now taken the decision of exiting the market remains uncertain. As per Surapong Paisitpatanapong, spokesman for the automotive industry club at the Federation of Thai Industries, GM is turning to high-potential markets in China, where it has sales of 3 million cars, rather than low competition markets in Southeast Asia.
GM also sold its manufacturing facilities in Vietnam to local auto company VinFast in 2019. Then, in late 2019, the distributor in the Philippines also terminated the contract with GM, effective from March. The distribution contract with a local partner for sales in Malaysia was also terminated in recent years.
It could probably be shifting its focus on other markets and regions but along with business how it reallocates the talent is also crucial. The local talent working at plants in Thailand are the one who would be most impacted by this decision. While Paisitpatanapong believes that Thailand's automotive industry will not suffer much from GM's exit, the talent in the country might take a hit with GM’s decision to exit the market.
Image Credits: GM Authority