On February 27th, 2015, General Motors’ Southeast Asia Operations announced a plant to restructure operations in Thailand. The objective behind the restructuring is to “better position the Chevrolet brand for long-term sustainable growth and is part of a series of restructuring actions the company is taking across the region.” The reorganization involves changes to the corporate office in Bangkok and manufacturing facilities in Rayong.
“Around the globe, GM is focused on becoming a more customer-focused and operationally efficient company,” said Tim Zimmerman, president of GM Southeast Asia Operations. “We must accelerate the transformation of our operations in Southeast Asia, particularly Thailand given the sluggish domestic market demand, by implementing changes to increase customer satisfaction and our competitiveness, speed up all processes, and put us in a better position to achieve future growth.”
Adapting The Product Portfolio
Currently, the Colorado midsize pickup, Trailblazer midsize SUV, Captiva midsize crossover, and Cruze compact passenger car make up 75 percent of Chevrolet sales in Thailand. The four models also make up over 95 percent of the vehicles that GM Thailand exports. As such, GM will focus its portfolio around these models. This means that the Sonic subcompact passenger car and Spin MPV will be discontinued “at the end of their current model year life cycle.”
According to GM, the move will allow Chevy to “compete more effectively and strengthen” the brand in Thailand and the rest of the Southeast Asia market.
Withdrawing From Eco Car Phase 2
In shifting its focus to trucks and SUVs in the country, GM Thailand will withdraw from the country’s Eco Car Phase 2 program, which awards manufacturers of low carbon emission vehicles privileges such as reduced excise taxes and other tax incentives, as long as they meet government requirements on fuel consumption, safety standards, engine size and production levels.
The automaker has already informed the Thailand Board of Investment (BOI) that it will no longer participate in the program.
Increasing Dealer Support
Meanwhile, Chevrolet Sales Thailand will collaborate with its dealer network to deliver consistent implementation of best practices, emphasizing the Chevrolet Complete Care aftersales service.
The goal is to ensure a higher level of service in order for customers to receive the support they expect from Chevrolet.
“Chevrolet Complete Care puts the customer at the center of everything Chevrolet does and focuses on building long-term and sustainable relationships with customers,” said Marcos Purty, managing director of GM Thailand and Chevrolet Sales Thailand.
Commencing Voluntary Separation Program
In addition to changing its product mix and dealer efforts, GM Thailand plans to restructure its organization. The goal is to “gain efficiency in all functional areas and give more accountability to employees.”
The automaker will begin a Voluntary Separation Program (VSP). Open to all employees, including salaried and hourly, the program will provide competitive terms and conditions for current employees who wish to participate.
“Transformation cannot be achieved without changes. GM aims to optimize our structure in Thailand to create greater opportunities for our business and support impacted employees,” Purty added.
Ensuring Long-Term Sustainability, Maximizing Shareholder Value
“Today’s actions are part of our larger global strategy to ensure long-term sustainability and maximize shareholder value”, said Stefan Jacoby, GM executive vice president and president, GM International. “We are dedicated to meeting the needs of our customers while bolstering our global operations. We are focusing our investments where the opportunity for GM’s growth is greatest. We have made solid progress in our region and this decision is an important part of this strategy.”
The restructuring of GM Thailand follows an even bigger restructuring at GM Indonesia, which involves shuttering its only manufacturing facility in the country by the end of June 2015 and resulting in the discontinuation of the Chevrolet Spin MPV in that market. The move turns GM Indonesia into a national sales company that will offer only four vehicles — the Chevrolet Orlando, Captiva, Colorado and Trailblazer — through its dealer network.