GM brings Thailand operations under Vietnamese management

Sumito Ishii will not only ensure continuity, but will centralise the management of GM's operations in the region (Source: bangkokpost.com)

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Alternative title: GM marries Vietnamese and Thai management

Ishii will fill in for previous managing director Wail A. Farhaly from Egypt, who left GM to pursue other opportunities. While GM has not called off what was termed as an “executive leadership transition” in Thailand by news source Bangkok Post, its strategy remains to focus solely on pickup trucks and SUVs in the local market.

Bangkok Post quotes Laurent Berthet, GM International’s director for brand and products communications, as saying that the company has high momentum for the Colorado pickup truck and the Trailblazer SUV, both made in Thailand, in Southeast Asia.

"In Ishii's dual role, he will ensure the continuity of our business in Thailand," said Berthet.

According to the company website, GM Thailand was established in 1993 and now has two facilities in the country: a manufacturing plant in Rayong province (opened in 2000) and a state-of-the-art powertrain facility (opened in 2011). The Rayong facility has an annual production capacity of 180,000 units, while the powertrain engine manufacturing plant can push out 120,000 units per year.

This shifting of high-level human resources comes in the wake of GM’s international restructuring bonanza in May 2017, when the company overhauled operations in India and passed on its South and East African sales and manufacturing operations to Isuzu Motors, as previously reported by VIR.

In particular, the company stopped production of vehicles in its Indian manufacturing facilities for domestic consumption and refocused efforts to produce for exports exclusively. In South Africa, GM also decided to stop sales activities and sold its Struandale plant in Port Elizabeth to Isuzu Motors. Additionally, Isuzu also agreed to buy 57.7 per cent of GM International’s East African operations, seizing management control.

“As the industry continues to change, we are transforming our business, establishing GM as a more focused and disciplined company,” said GM chairman and CEO Mary Barra. “We are committed to deploying capital to higher return initiatives that will enable us to lead in our core business and in the future of personal mobility.

“Globally, we are now in the right markets to drive profitability, strengthen our business performance and capitalise on growth opportunities for the long term. We will continue to optimise our operations market by market to further improve our competitiveness and cost base,” she said.

Cutting off losing operations and streamlining operations, including management and oversight, falls heavily in line with the global strategy outlined by CEO Mary Barra. Centralising management over Thailand and Vietnam is not entirely surprising either, as at the same time as retreating from India as well as South and East Africa, GM also strengthened its regional headquarters in Singapore, reinforcing its strategic oversight over its remaining markets, including Australia and New Zealand, India, Korea, and Southeast Asia.

Creating more cohesive business units by assimilating management positions at markets that are not only enjoying geographic proximity but are strongly co-operating in trade simply makes sense.

At the moment, Vietnamese car imports are going through the roof due to the country reducing tariffs as per its ASEAN commitments. As reported by newswire VNExpress, imports from Southeast Asian neighbours, primarily from Thailand, are driving the Vietnamese car market. Only in the first half of January, car imports surged by 50 per cent against the same month in 2016, to hit 5,000 units and $116 million, customs data shows.

Tariffs on cars from Thailand and Indonesia dropped to 30 per cent at the start of the year, instigating the surging imports and reducing the price of many imported units by 7 per cent.

Imported cars from Thailand dominate the market, mainly with the Mazda, Toyota, and Ford brands, but GM Vietnam had a promising beginning of the year as well. As previously reported by VIR, GM’s market share in Vietnam grew to 4.7 per cent from 2016’s 3.6, producing a 30.6 per cent increase, far ahead of the rest of the market.

Probably another strong point towards sharing a managing director between the two countries is the fact that the Colorado pickup truck produced in Thailand is in fact GM Vietnam’s best-selling model, with about 607 units from 3,783 sold in total this year until April.