GM is pulling in as it positions itself for the uncertain future. It announced today it will kill the iconic Holden brand of GM vehicles in Australia. It is also pulling out of the other countries it sells right-hand-drive vehicles to which are New Zealand and Thailand. It already left the EU when it sold Opel and Vauxhall in 2017. Obviously the need for engineering and manufacturing right-hand-drive vehicles sort of went away once GM sold Opel and Vauxhall.
With the sale of Opel/Vauxhall, this was inevitable, but it is still sad news. Holden had been in business for 146 years. It started making saddles before GM acquired it 100 years ago. With these moves. GM sees an increase in profits of $2 billion over 2018.
GM pulling manufacturing out of Thailand was a bit of a surprise
Pulling out of Thailand was a bit surprising as it is a major pickup truck market. It will be selling its manufacturing plant there to Great Wall Motor Co. While GM’s plans seemed to be to expand operations in Southeast Asia closing manufacturing in Thailand ends that pursuit.
GM now plans to double down on the US, China, Latin America, and South Korea. According to Automotive News in countries like Japan, Russia, Europe, and Australia GM will try to maintain a niche presence selling imported vehicles into those countries.
GM CEO Barra says killing Holden and pulling from Australia, New Zealand, and Thailand helps the future of mobility
“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,” said GM CEO Mary Barra. “I’ve often said that we will do the right thing even when it’s hard, and this is one of those times.”
Barra’s general plan since becoming CEO has been to prize profit margins over volume. In 2015 GM pulled the Chevy brand from Europe and also pulled out of Russia. Following that GM left Vietnam, Indonesia, and India. Besides the sale of Opel/Vauxhall in 2017 GM also left all African markets including South Africa.
GM’s market share in Australia was down to 4%
In the mid-2000s GM held a respectable 13% share of the Australian market. Now it is down to 4%. With such a small footprint there it made selling right-hand products much less profitable. At the time GM stopped Holden manufacturing in 2017 it said it was “going to be a part of the fabric of the country for a very long time.” In the current climate three years has become a “very long time.”
Australian Prime Minister Scott Morrison had a few things to say about the GM news and it was not good. “Australian taxpayers put billions into this multinational company,” he said. “They let the brand just wither away on their watch.”
GM has now sold plants to Great Wall Motors in India and Thailand
While GM is selling its plant to Great Wall, it also did the same when it left India. It’s interesting that once GM leaves a market Great Wall moves in to take up the slack. With such an almost instant product void and plant availability, Great Wall sees opportunities where GM doesn’t.
Currently, Holden manufacturing was coming from Thailand after closing its Australian plants back in 2017. It estimates there are over 1.6 million Holden vehicles currently on the road.