GM May Invest In Thai Pick-Up Truck Operating; Upbeat On China

BANGKOK October 18, 2003; Rattaphol Onsanit writing for Dow Jones reported that General Motors Corp. is likely to invest in pickup truck production in Thailand, its next major investment in Southeast Asia, but its key market in Asia will continue to be China, a top company executive said Saturday.

"We want to make sure that our principle priority in (the Southeast Asian region) will go to a good business in Thailand," Frederick Henderson, GM's Asia Pacific president said at a press briefing on the sidelines of the Asia-Pacific Economic Cooperation meeting.

GM said last week it is considering making an additional investment in Thailand within the next few years by adding new models to its facility in the Rayong province in Thailand's eastern seaboard area.

Asked if the upcoming investment in the country will be funneled to its pickup production, Henderson said, "it's on our radar screen."

GM's first assembly plant started production in 2000. The company so far has invested more than $700 million in Thailand. Its plant produces Isuzu pickup trucks, mid-sized sedan Optra and multipurpose vehicle Zafira. The total production this year is expected to be 45,000 to 50,000 units.

GM started producing Isuzu Motors Ltd.'s pickup trucks for export in June. The production line has a full capacity of 45,000 units a year. But it doesn't market the product locally.

Henderson said an expected bilateral free trade agreement between Thailand and the U.S. isn't likely to have any major impact on GM strategy in Thailand.

He said the free trade deal between the two countries will create favorable opportunities for future expansion, "but that wouldn't cause a sea change."

GM isn't planning to export vehicles made in Thailand to the U.S., he said.

Elsewhere, Henderson said GM will continue to invest more in the fast growing China car market.

In Asia, "investment in capacity in the near term will be in China," he said.

GM has currently around a 7.8% market share, compared with slightly over 7% last year, in China where 4.4 million cars and trucks are expected to be sold this year, up from 3.4 million units last year, he said.

Meanwhile, GM's fledgling presence in Vietnam is facing uncertain regulatory issues such as requirements on local contents, William Botwick, Asian operations director for General Motors Asia Pacific, also said at the press briefing.

"One of the main issues in Vietnam is its policy in the future. If there's no policy change, we need to assess the impact and react," he said.