Published on 30th of July 2010
GM lifting local content By Santan Santivimolnat General Motors says it plans a major increase in purchases of local components and related services within three years to US$1.6 billion (51.6 billion baht) annually, to support new automobile and diesel engine production in Thailand and its other manufacturing bases in Southeast Asia. Purchases of about $6 billion a year worth of Thai-made components are slated to support automobile production in Thailand's neighbouring countries. GM currently buys about $100 million worth of locally produced parts and other services per year for its activities in Thailand and another $100 million for other countries in the region. The purchasing strategy is part of a plan to drive the next stage of growth in Thailand and Southeast Asia, said Martin Apfel, the president of GM Thailand and GM Southeast Asia Operations (GMSEA). The higher value of local component purchases is necessary for GM's new diesel engine manufacturing plant and GM's two new vehicle products planned for production in Thailand. The exact cost of the diesel engine plant is not available but is already included in the $500million plan. The diesel plant, located in Rayong province, is approaching the final stage of construction. The 2.5- and 2.8-litre engines were jointly developed with the Italian engine maker VM Motori. GM plans to produce new Chevrolet trucks and truck-based sport-utility vehicles with the new diesel engines."Key markets in Southeast Asia are booming, especially within the Asean 'Big Three' - Indonesia, Malaysia and Thailand," Mr Apfel said. He said the Thai economy was slated to grow more than 6.5% this year, while GM's year-todate sales have risen 24%. Indonesia enjoyed its best-ever figures in June, while Malaysia also had a record first half, registering growth of 20% year-on-year. In total, Chevrolet sales in Southeast Asia rose 22.9% year-on-year. One of the ways in which GMSEA will lay the foundation for growth includes growing local engineering capabilities. "We are growing our local engineering capabilities and expanding our local engineering centre by 20%. We need to build where we sell, and for that to become a reality we need even
Published on 30th of July 2010
more localisation," he said. Building closer relationships with employees is another area that will help sustain growth. GMSEA will focus on getting employees to be more engaged and informed, making them a part of everything GM does. Another area GM Thailand is taking a look at is after-sales services. Chevrolet Sales (Thailand), the distribution arm, has been working closely with its dealers to develop service quality and customer satisfaction. Discussing new products, Mr Apfel said some of the successful launches in the region included the Chevrolet Spark in Indonesia and the Chevrolet Cruze compact sedan in Indonesia, Malaysia and Singapore. "The Chevrolet Cruze is the key product coming to the region. It's a dramatic reinterpretation of the traditional sedan, featuring Chevrolet's new global design language that is becoming a signature on all new products," he said.