SOUTHFIELD (Michigan) • General Motors (GM) will leave Australia, New Zealand and Thailand by the year end as it exits poor-performing markets and focuses on new technologies such as self-driving cars and electric vehicles.
The largest United States automaker will take US$1.1 billion (S$1.5 billion) in charges mostly in the first quarter, of which US$300 million is cash, to cover the costs of leaving those markets, it said in a statement. The restructuring marks the end of the 164-year-old Holden brand in Australia, while in Thailand, GM is withdrawing the Chevrolet badge and selling its Rayong plant to China's Great Wall Motor.
Chief executive Mary Barra is shrinking GM to the point where it gets almost all its profits from the Americas and China. She is reducing its global presence and betting on technology rather than pouring money into struggling markets.
"I've often said that we will do the right thing, even when it's hard, and this is one of those times," Ms Barra said. "We have the right strategies to drive robust returns, prioritising global investments that will drive growth in the future of mobility."
The downsizing is part of a long-running strategy at GM since the Detroit-based company emerged from bankruptcy in 2009. The company pulled the Chevrolet brand from Europe in 2015, left Russia that same year and sold its German Opel unit and British Vauxhall brand to France's Peugeot in 2017.
The company will wind down sales, design and engineering operations in Australia and New Zealand and retire the Holden brand by next year. GM president Mark Reuss ran Holden in 2008 and 2009 but, since then, its market share has fallen to 4.1 per cent from almost 13 per cent.
The reorganisation kills off an Australian icon. Holden produced the country's first wholly locally made car in 1948. By the end of the century, the Commodore sedan was the country's best-selling car and remained so until 2011.
But the brand's future in Australia has been in doubt since GM closed its Holden factory in the South Australian suburb of Elizabeth in 2017. The company has been struggling in Australia for several years with low sales volumes and high manufacturing costs.
As GM downsizes overseas, the company is pouring money into electric vehicles in a bid to catch up with Tesla. GM has already spent several billions to develop self-driving cars with Cruise, which it bought in 2016.
With Australia and New Zealand being axed, the company's primary focus other than the US will be China, Mexico and South America.
BLOOMBERG
