A day after announcing it is to stop making GM-branded cars in Indonesia, General Motors said on Friday it would cease production of its Chevrolet Sonic in Thailand by the middle of this year.
While GM will still sell cars like the Cruze sedan in parts of Southeast Asia, an emerging markets battleground for global automakers, it is shifting focus to push the ‘American heritage’ of its SUVs and pickups such as the Trailblazer and Colorado, Reuters reported.
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The restructuring – under executive vice president Stefan Jacoby, who oversees markets beyond the Americas, Europe and China – marks a retrenchment in Asia by the US automaker. While business grows in China, the world’s biggest autos market, GM has struggled in other parts of its international operations unit, which doesn’t include China.
The Detroit-based automaker has signaled overall restructuring charges of about US$700m this year, and said last month it expected an improved consolidated operating performance from Jacoby’s International Operations unit.
GM’s Thai plant in Rayong, an industrial city southeast of Bangkok, will be scaled down from current annual capacity of 180,000 vehicles. The company did not elaborate, but said it would initiate a “voluntary separation programme” for staff. In total, GM employs around 3,200 people in Thailand.
In Thailand, GM sold close to 26,000 vehicles last year, giving it 3% market share, according to LMC Automotive, which puts the combined market share of major Japanese rivals at more than 60%, according to Reuters. GM said it will phase out sales of the Spin and the Sonic in Thailand by June.
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By GlobalDataThe overhaul in Indonesia and Thailand follows GM’s 2013 retreat from car production in Australia, and industry analysts now expect GM to restructure its manufacturing operations in South Korea, a big production hub for the US firm.
Susquehanna Financial Group analyst Matthew Stover told Reuters South Korea had shifted from a developing market cost structure over the last decade to being almost as expensive for car production as Japan.
“I don’t think what’s happening in Korea is even close to (being) done. It’s the biggest problem,” Stover said.
