Abruptly and surprisingly, GM has just announced the end of its manufacturing operations in Colombia and Ecuador.
The automaker’s South American subsidiary announced the drastic decision to shut its manufacturing operations in Colombia and Ecuador as part of a transformation of its business model in the countries, which implies the closure of the two vehicle production plants that operated in both nations since the 1970s. GM will maintain its commercial activity in the Colombian and Ecuadorian markets exclusively with imported vehicles.
“The company from now on operates in Colombia and Ecuador under an exclusively commercial operation model,” said the communications department of GM South America. “This new business model is backed by the excellence of the sales and after-sales services of its dealer network, with a global vehicle offering, designed to meet new consumer needs.”
The shutdown of GM’s manufacturing operations in Colombia and Ecuador marks the definitive end of the company’s industrial activities in the Andean region of South America, marked by very low utilization of installed capacity. GM South America reports the immediate closure of the GM Colmotores plant in Bogotá, which operated at 9 percent of its capacity. Meanwhile, the GM OBB plant in Quito will close in the third quarter of the year after operating at 13 percent of its capacity.
“The manufacturing operations will cease at the Colmotores plant in Colombia and the disassembly process begins today (April 26th, 2024) with a reduced team. At the OBB plant in Ecuador, manufacturing will cease at the end of August 2024,” the company stated.
In the last few years, the competitiveness of GM’s manufacturing operations in Colombia and Ecuador has been severely affected by the wide opening of the automotive markets of both nations – which have free trade agreements with the world’s major developed countries. This, combined with the small size of the markets and multiple other factors, made GM’s industrial presence in Colombian and Ecuadorian territory unsustainable.
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Comments
Cheap Chinese imports will do a number on the entire auto manufacturing industry in South America (and Mexico, for their own market at least). GM has enough presence in the Brazil and Argentina markets to last longer. As for Colombia and Ecuador, aren’t they down to rebadged Isuzu trucks and buses? 9-13% capacity isn’t sustainable for sure.
“Cheap chinese” isn’t even a thing anymore. Their advantage was always slave labor and no regulation. Even for their planned “EV assault” on the United States they are building factories in Mexico.
Need examples ? The tax and new Sub-compact we import are Korean. Why? Cause it’s cheaper to have vehicles build by unions in countries that value work than slaves in china who barely meet their quotas. That’s part of the reason Buicks are no longer imported either. They weren’t making money on them after the Chinese got finished with them. Buick was being built in china because they thought that the high Chinese sales would justify consolidating production.
This is more about these countries being so corrupt that business is impossible. GM will double down on Brazil and freedom loving Argentina.
GM China sales have dropped by half since 2016. They need higher utilization, and export is a solution. I predict at least one additional Buick lands here and, why not, seeing promotions will be only expense.
Would love La Crose or the new EV sedan/wagon concept
Combo of heavier GM vehicles and cheap chinese imports are the cause.
Time for GM to learn to make lighter vehicles with higher fuel efficiency.
They aren’t making Tahoes or 3500 Silverados down there, the Chevrolet Joy is a subcompact.
The trade agreements the countries have with other countries is what made the local manufacturing unfeasable, they’ll just import from Brazil or Mexico, etc.
The real big difference is that the chinese auto workers get the same payment that any other workers, and their executives do not get millions in bonuses every year, they do not travel in private jets and live in luxury..
That is why the chinese vehicles are taking over the auto market in the Worlds.
I am Ecuadorian, Chevrolet has always been a leader in sales, models that were assembled were the Sail, Aveo, Monza, there with the collaboration with Isuzu and Suzuki were the Trooper, Rodeo, Vitara and Grand Vitara; They currently only assemble the Dmax and MT134s front-engine bus chassis.
Currently, the clientele in my country want low-price vehicles but with excellent quality, the only ones that did that are Ciauto, a direct assembler of Ambacar, who now assemble Great Wall, Haval, SWM and KYC.
On the other hand, AYMESA, which assembles Kia, Hyundai and the Chinese JAC, is having problems with payments to its workers due to delayed salaries and as a final point, the tariff on imported cars has been lowered a little.