On Monday, General Motors entered the Kingdom of Cambodia — a country situated in the southern portion of the Indochina Peninsula in Southeast Asia. The General has officially launched the Chevrolet brand in the country by launching its first dealership in Phnom Penh — the country’s capital and largest city.
According to president of GM’s Southeast Asia Operations Martin Apfel, the firm’s expansion to the country was thanks to its rapid economic growth in last decade as well as high demand in brand new cars. Coincidentally, the demand for new cars in Cambodia is roughly 2,000 units a year, while annual demand for used cars is about 20,000 units. Mr. Apfel also stated that the Cambodian auto industry is expected to grow by 15 percent in 2013.
Cambodia’s United Auto Trading will be the exclusive distributor of Chevrolet cars in the country.
“Cambodian automotive market is small, but growing rapidly,” said chairman of United Auto Trading Tong Norm.
Meanwhile, Cambodia’s Minister of Commerce Cham Prasidh said during the launch event that the presence of Chevrolet reflected investors’ confidence in Cambodia’s security and political stability as well as good business opportunity.
Chevy has yet to announce the models it will offer in Cambodia, but sources have tipped us that the Sail, Sonic/Aveo, Cruze and Spark will likely round out The Bow Tie brand’s lineup in the country. We will update this article as soon as we get word on the official lineup.
The GM Authority Take
Even though 2,000 new car sales a year might seem like peanuts compared to high sales volume markets such as the United States, China, or Europe, The General is in the expansionary phase of its recovery — and it needs all the sales it can get — especially if it plans on winning back the “biggest global automaker” title rom Toyota and/or VW.
Comments
Anyone else spooked by the Japanese yen?
Anyone with real P&L experience willing to venture what the hard US based manufacturing costs represent as a % of ASP for an Accord/Malibu?
Let’s say based on taking my car to the shop where a replacement window switch costs $6 self-installed costs (plus my labor at $6 = $12) vs $100 dealer installed that manufacturing is 12%.
That means 88% of the cost of bulding an Accord is pretty much Yen-based costs. Is that the right way to think about this?
Kid, it means that product they get from Japan is much cheaper than here. Part from Japan are much cheaper as are cars. Honda may assemble a vehicle in the U.S., but it may contain 50% Japanese parts. If those parts cost 33% less to ship them across the world, then Honda may save $1000 or so per car just because of the yen. Multiple that by a couple of million and you have serious cash and a serious competitive advantage.
In the case of Toyoda, they’re still importing approximately 30% of their volume from Japan. Lexus may even be making a 15% to 20% margin right now because of the Yen; not sure, but they’re making a killing. Thus, they can pay for additional market share because of the competitive advantage they have over competitors provided by the Japanese government. And the U.S. autoworkers are the ones that feel the pain.
Thanks