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GM plans $445m plant in Rayong |
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General Motors is preparing to invest US$445 million (15 billion baht) in a diesel engine plant and production line retooling in Thailand as part of its strategy for growth in emerging markets. The new plant in Rayong will supply diesel engines for Colorado pickup trucks, taking the place of the local Isuzu diesel engine factory, as GM has divested its holdings in the Japanese automaker. Slated to begin production in 2010, the plant will make 2.5- and 2.8-litre engines for small pickups and would have a capacity of more than 100,000 units annually. It would initially employ 340 workers. The 14,492 square-metre facility will be GM's first diesel engine plant in Southeast Asia. It will be located next to the assembly plant that opened in 2000 and now employs 2,000 people. GM said the remaining investment would be used for engineering development and retooling of the vehicle manufacturing plant in Rayong as well as production of the next-generation Colorado small pickup for sale in Thailand and abroad. The new investment would enable GM and its flagship Chevrolet brand to become stronger players in Thailand and across ASEAN, GM chairman and chief executive Rick Wagoner said at a groundbreaking ceremony yesterday in Rayong, Thailand. ''This plant is an example of how we are proactively pursuing two key aspects of GM's global strategy,'' he said. ''The first is the accelerated application of alternative fuels and propulsion systems to reduce global dependency on fossil fuels. The second is growth in the emerging markets, including the ASEAN region, as a key factor in our continued global leadership.'' Industry Minister Mingkwan Sangsuwan, who attended the event, said Thailand would be in a position to produce two million vehicles annually within five years, given the continued investment and rising demand for locally built vehicles in Thailand and export markets. He said the government's long-term plan aimed for Thailand to become a leader of the next generation of vehicles and fuels for local and global marketplaces. It includes the production of eco-cars that use less fuel, and the increased promotion of alternative fuels. Toyota Motor Corporation, poised to overtake GM this year as the world's top automaker, announced two months ago that it would invest 5.4 billion baht to expand its diesel engine plant in Thailand to 350,000 units per year from the existing 200,000 units. The plant is scheduled to begin commercial production in 2010. Toyota projected demand for diesel engines would grow to 300,000 units in 2010. Speaking about the global rivalry with Toyota, Mr Wagoner refused to concede that GM might fall into second place. ''This year is not over yet,'' he said. ''We don't worry about coming back to be No. 1, but we want to be driven by outstanding cars and trucks, the latest technology and participating in the world market overall.'' Although GM has increased its market share in Asia, by its own calculations, to nearly 7% from 5.9% in the last three years, it sales remain small compared with North America, where it still makes one out of every five cars sold. ''GM needs Asian markets more than other automakers do to offset sluggish demand at home,'' said Matthew Kong, associate director of Fitch Ratings in Beijing. In Thailand, GM has benefited in the last decade from its partnership with Isuzu. GM has kept costs down in Thailand by cutting the number of expatriate managers to about 10, from 40 earlier in the decade. It has instructed its workers to follow the Japanese formula of ''kaizen'', or continuous improvement, and the plant uses the just-in-time production system. Entry-level
workers earn about 8,000 baht a month at the factory. |
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The Nation, 14. August 2008 |
