THAILAND — Great Wall Motor Co. agreed to buy General Motors’ Thailand manufacturing plant, a transaction expected to be completed by the end of 2020.
In rearranging its global operations, GM is accelerating a retreat from unprofitable markets, becoming more dependent on the United States, China, Latin America and South Korea. GM said it will also pull the Chevrolet brand from Thailand, a major pickup market. With the proposed sale of the Thailand plant to Great Wall, GM is giving up an opening to expand operations in Southeast Asia.
“[GM is] focusing on markets where we have the right strategies to drive robust returns, and prioritizing global investments that will drive growth in the future of mobility, especially in electric and autonomous vehicles,” says GM chairman and CEO Mary Barra.
Great Wall, one of China's biggest SUV makers, said it will sell vehicles from the Thai manufacturing plant in Thailand, other ASEAN countries and Australia as the Baoding-based automaker seeks to expand globally amid a slowing domestic market.
In January, it signed an agreement to buy a GM plant in India. The companies said they expected the transaction would be completed by the second half of 2020.
“Such an acquisition could give Great Wall quick access to the ASEAN market, and Thailand is a good choice for its production base amid the country's established supply chain in the automotive industry,” states Shi Ji, analyst at Haitong Internation.
Great Wall is likely to face fierce competition from Japanese automakers which dominate Thailand's domestic vehicle sales. Thailand produces around 2 million light vehicles each year, with just over half exported. Great Wall may consider also building pickup trucks and SUVs in Thailand, a source familiar with the matter told Reuters.
The automaker, which is building a car plant in China with BMW Group, sold 1.06 million light vehicles last year, including 65,175 units for export.