Bharat Bhise on General Motors and Its Strategy: Pulling Out of Australia, Thailand, and New Zealand

Bharat Bhise reports on the latest news about General Motors.

The company, also known as GM, will be exiting three countries that haven’t provided them with enough return for their investments.

Countries that will be affected include Australia and New Zealand, where the iconic brand Holden will be discontinued in 2021. Another country involved is Thailand, where Chevrolet will be pulled out by the end of the year.

The Rayong plant in Thailand will also be sold to a Chinese automaker called Great Wall Motors. In total, the company has built around 1.35 million vehicles in the plant since it was first opened in 2000.

A Big Financial Hit Bharat Bhise notes that with the exit, the American automaker company is expecting to take a total hit of $1.1 billion, with roughly around $300 million cash loss.

Last year, GM also lost $200 million on its International Operations in Asia, which included China. This includes the $100 million loss during their fourth quarter.

GM’s Holden has seen its highest market share in 2002, where it reached a peak of 22.1%. However, it declined a year after, and since then, the numbers are getting lower.

Last year, they saw their lowest market share at 4.1%.

Eyeing Other International Operations Bharat Bhise says this wasn’t the first time General Motors is dropping off operations and selling their plants, as they have also sold off a few other international operations in the last few years. In 2017, GM sold European brands Vauxhall and Opel to PSA Group, which owned Peugeot, for $1.4 billion.

The automaker company has a total of 828 employees in both Australia and New Zealand. Meanwhile, they have around 1,500 employees in Thailand. Nevertheless, GM promises they will be helping their employees in these companies during the transition.

For now, Bharat Bhise notes that General Motors is focusing their strategies in countries in South America, South Korea, and the Middle East where they believe they can “drive robust returns.” They will also be keeping a small specialty vehicle business in New Zealand and Australia.