General Motors (GM) the parent company of Chevrolet and Holden is pulling out of Australia, New Zealand, and Thailand. The departure from these markets is part of the company's push to leave areas that do not produce an adequate return on investments.
In response to the company's departure from these select areas, its Chairman and GEO Mary Barra had a few words to say on the matter. Barra states that the company will focus on other markets where sustained growth and better return on investments is more feasible. She continues by saying that the company will prioritize global investments that will drive growth in the future of mobility.
Why the GM pull-out is relevant to Chevrolet Philippines.
One of the main brands affected by the GM pull-out in Thailand is Chevrolet. As part of the GM umbrella company, the Golden Bowtie company has stated that it will slowly cease its operations in Thailand and leave the market by 2020. The country has been deemed unprofitable due to increased competition in the area. Chevrolet has already made preparations to leave the area, with the sale of its Rayong plant in Thailand. This production plant has already been sold off to Great Wall Motors.
The importance of the factory for the ASEAN market lies in the fact that it is the main location where Chevrolet used to make it's two most popular models, the Trailblazer SUV and Colorado pickup truck. Subsequently, this is also where parts for and Philippine bound vehicles are made. In other markets, the Detroit based brand is also struggling as these have produced small sales numbers. It also doesn't help that the Chevrolet has an aging lineup in the area which is being beaten by its newer more technologically advanced competitors. With that in mind, it's not hard to see why the brand and its parent company are struggling in the ASEAN area. With the main source of its production, now-defunct Chevrolet Philippines will have to source its vehicles elsewhere
Chevrolet in the Philippines is here to stay
Unlike our neighbors in the Southeast Asian region who are directly affected by the departure of General Motors from their markets, the Philippines has a different situation. Chevrolet locally is under the distributorship of The Covenant Car Company, Inc. (TCCCI). It acts as the local partner of General Motors in the Philippines and as such can still continue to sell GM based products in the Philippines despite the loss of the production hub in Thailand. GM reassures that the local market, that it hasn't given up yet. GM Southeast Asia President Hector Villareal released a statement on the matter reassuring that GM will continue working with its partners at TCCCI to grow Chevrolet in the Philippines. Simply put the Golden Bowtie is here to stay and won't be going anywhere any time soon.
Worried about parts?
Now you may be wondering, what about parts? Since the Thailand plant is closing where will parts for the Philippine market be sourced? Not to worry as GM assures that the Philippines will still be receiving spare parts albeit from other sources. General Motors still has other plants within the Southeast Asia region that can be used as a source for parts locally. This means that aftersales will continue as normal. Factories that could be used as a source for these spare parts are in places such as Korea, Vietnam, and the United States (U.S). The U.S is already the main source for parts for vehicles such as the Camaro and Suburban being sold locally. So, with plenty of options available for parts, all that TCCI has to do is choose a location.
Where could Chevrolet Philippines source its vehicles next?
While Korea and Vietnam are the next likely choices to source vehicles from, TCCCI might opt for China instead. Chinese sourced vehicles come with the benefit of the ASEAN China Trade agreement, this significantly lowers the taxes of these vehicles allowing them to have competitive prices in the local market. Vehicles from the People's Republic also have the benefit of being Left-Hand-Drive (LHD). It means that there is no tooling required to adapt these vehicles for the Philippine market. This wasn't the case for Thailand sourced units as the country was a Righ-hand-drive nation. it meant that the factory needed to have separate tooling and assembly for LHD vehicles.
Another bonus from using China as a source is that General Motors already has an ongoing partnership with SAIC- motors. It is one of the biggest car manufacturers in China and therefore can easily serve the Philippine market as well. TCCCI is also no stranger to importing Chinese made vehicles as the company distributes MG locally. It gives the company an advantage as it is already familiar with the process of bringing vehicles made by the People's republic into the country.
Importing cars from China comes with risks and can be a hit or miss. Some brands have already experience problems selling these vehicles. MG Philippines is no stranger to this and has actually experienced great success with these Chinese made vehicles. Its success comes in the form of great sales figures for 2019, with over 5,000 units sold last year. The Brittish inspired brand even made it into the top 10 automotive brands of the Philippines for 2019. With great accolades under its belt it's not hard to see that TCCCI could viably use China as a source for its vehicles.
With many options at its disposal TCCCI still has a lot of wiggle room when it comes to keeping Chevrolet in the Philippine market, so don't count Chevrolet out just yet.