Indonesia - GM shrinks in Indonesia, Thailand in new SE Asia overhaul

Lesedauer: min

General Motors will stop making cars in Indonesia on its own, ending production of the Chevrolet Sonic in Thailand, and is withdrawing from a low-emission vehicle program launched by the Thai government.

But GM and two of its Chinese partners, Shanghai Automobile Industry Corp. and Wuling, are building a new plant in Jakarta to make Wuling brand cars for export to Indonesia and other Southeast Asian markets.

The moves are part of a broader assessment of the company's business in southeast Asia, where China is the primary source of profits.

"Today's actions are part of our larger global strategy to ensure long-term sustainability and maximize shareholder value," said Stefan Jacoby, president of GM international operations.

While GM has been making cars in Indonesia since 1938, Toyota, which entered that market in 1973, has 35% of the market compared with GM's 2%, according to IHS Automotive.

The latest decision comes after GM decided in late 2013 to end production of Holden brand vehicles in Australia.

GM said Friday it would withdraw from Thailand's "Eco Car 2" plan to encourage automakers to increase production of a low-emission vehicle. It will continue to produce the Chevrolet Colorado pickup, Trailblazer and Captiva SUVs, and Cruze sedan. Together those models account for 75% of Chevrolet's sales in Thailand.

But sales of all vehicles in Thailand fell more than 30% last year to 881,800, according to the ASEAN Automotive Federation.

"We must accelerate the transformation of our operations in Southeast Asia, particularly Thailand given the sluggish domestic market demand," said Tim Zimmerman, president of GM Southeast Asia Operations.

Indonesia also has encouraged automakers in that country to make more low-cost green cars, but they are requiring participating companies to buy nearly all the parts from local suppliers.