GM Sees Business Expand Significantly in Middle East but Has No Plans to Re-Enter Iraq

DETROIT November 17, 2004; John Porretto writing for the AP reported that General Motors Corp., the world's largest automaker, has seen its business in the volatile Middle East grow more than 60 percent this year, but the company has no presence in Iraq and no immediate plans to re-enter the ravaged country.

Maureen Kempston Darkes, GM's vice president for the Latin America/Africa/Middle East region, said Tuesday that new models from Chevrolet and Cadillac have led GM's surge in the Middle East.

GM has operated in that part of the world for roughly 80 years, and its trucks, sport utility vehicles and premium cars traditionally have been top sellers.

But changing demographics have prompted a shift in demand for smaller cars, Kempston Darkes said. As such, the automaker -- No. 2 in the region behind Toyota Motor Corp. -- has begun touting Chevrolet as its "fundamental brand."

Kempston Darkes, speaking at a briefing for automotive journalists, said at least half the region's current population is under the age of 25.

GM spokesman Gus Buenz said the company sells small Chevy cars such as the Aveo and Optra and other vehicles built at GM plants in South Korea, Australia and North America. GM also has established a dealer network to sell the Cadillac, Hummer and Saab brands together in about 10 Middle Eastern countries, including Saudi Arabia and the United Arab Emirates, Kempston Darkes said.

GM ended business in Iraq more than a dozen years ago because of U.S. sanctions imposed at the time of the first Gulf War, which started in 1991. U.S. economic sanctions also prevent it from conducting business in Iran, said Kempston Darkes, who directs her extensive region from offices in Miami.

Over time, she said, it would be natural -- and good business -- for GM to re-establish normal operations in Iraq.

"By normalizing, I mean having a full distribution/retail network -- local dealers there, selling vehicles, servicing vehicles," she said. "At this time, that's not possible given the security situation. When that will happen, I don't know."

GM does business in 15 markets in the Latin America/Africa/Middle East region, which covers 86 countries. The region accounts for roughly 8 percent of GM's global sales -- or about 1.2 percent of GM's 15.5 percent global market share.