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March 14, 2017

GM to Reduce Investment in Thai Operations

It seems the sale of Opel and Vauxhall is just the first step for General Motors, if a report by Automotive News, is anything to go by. In the report, CEO Mary Barra has said that GM isn’t going for volume anymore (the sale of Opel and Vauxhall shrinks their global volume by 12 percent), but will instead concentrate on making every country, every market segment “earn its cost of capital.”

With that, GM is targeting several parts of its operations, either reducing investment or killing them off altogether. Though Barra and GM President Dan Ammann declined to elaborate what those money losing investments are, fingers are pointing strongly towards the company’s international businesses including South America, Australia, Indonesia, and surprisingly, Thailand. Automotive News said that GM has already started “limiting operations” in those countries.

This may affect how GM and its brands like Chevrolet will roll out new models in the foreseeable future. For instance, the gap between updates and new generation models may lengthen. It will also mean that existing platform lifespans may have to be stretched to enable them to recoup their investments.

Savings from these operations may be diverted to markets and segments which GM sees as lucrative such as China, Cadillac, and autonomous vehicles.

Source: Automotive News

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