General Motors is officially pulling out of underperforming markets, a move that is part of a wider strategy to lessen costs and exposure amid its efforts to accelerate investments into its electrification and on newer technologies such as autonomous driving.
The US automaker announced on Sunday that it will be killing off its iconic Holden brand, effectively ending its operations in Australia and New Zealand. The Holden marquee has existed in the Australian and New Zealand markets since 1856. GM also announced plans for shutting down its engineering, design, and sales operations in the region.
Apart from pulling out of Australia and New Zealand, GM also revealed that it will be shrinking its presence in other parts of Asia Pacific. In line with its plan, the company revealed that it will be halting sales of its Chevrolet-branded vehicles in Thailand by the end of this year. The company reportedly has signed a deal with China's Great Wall Motors, which had agreed to purchase its manufacturing plant in Thailand.
The massive pullout is expected to cost the company around $1.1 billion, with $300 million from cash loss directly related to costs from the retreat. The decision to retreat from the Australian and New Zealand markets have long been in the company's itinerary as it has been slowly shrinking operations in the region since 2013.
GM's decision to exit follows a series of similar decisions from other carmakers over the years, effectively killing the car the manufacturing industry in the region. The last Australian-made vehicle to roll out of the production line was the Holden Commodore sedan, which was manufactured in the company's factory in the southern city of Adelaide.
In a statement released on Sunday, GM acknowledged that the retreat was a difficult decision for the company. However, to save costs, the company has been forced to pull back on markets that are not making adequate returns for its shareholders. The strategy involved the need to transform its current operations.
GM CEO Marry Barra mentioned that the decision was the right move to make even if it will be difficult. Since taking the reins as CEO in In 2014, Barra had been on a mission to overhaul the automaker's operations. Under her leaders, GM had increased its efforts to boost its presence in more profitable markets such as China. The company has also heavily invested in emerging technologies, including self-driving technology, ride-sharing, and electric drivetrains.
Since Barra took over, the company had also slowly shed its underperforming brands. In 2017, the company sold its European brands Vauxhall and Opel to the PSA group, in a deal estimated to be worth around $1.4 billion. During the same year, GM also scaled back its operations in South Africa and India. A year later, the company sold its factories and dealership networks in Vietnam to the local automaker VinFast.
