GM Ties Up With Malaysian Firm to Produce Chevrolet Cars for Southeast Asia

[NINETY_EIGHT_REGENCY]

GM Ties Up With Malaysian Firm
Associated Press 08.28.07, 5:16 AM EST

KUALA LUMPUR, Malaysia -

A unit of U.S. automaker General Motors Corp. tied up with Malaysian conglomerate DRB-HICOM Bhd. Tuesday to explore making Chevrolet cars for Southeast Asia's booming market.

Under the pact, the companies will "explore the establishment of a local vehicle assembly program as well as a manufacturing hub for the production of Chevrolet vehicles, parts and accessories" to be sold in the 10 countries making up the Association of Southeast Asian Nations, they said in a joint statement.

General Motors (nyse: GM - news - people ) Asia Pacific Holdings LLC will hold a 51 percent stake and DRB-HICOM the remaining 49 percent in the joint venture, which is expected to begin operations in October, the statement said.

"As the largest market for passenger cars in Southeast Asia and a key member of the ASEAN community, Malaysia is a country in which GM believes we must have a major presence," said Steve Carlisle, president of GM's Southeast Asia operations.

No further details were available. Company officials couldn't be immediately reached for comments.

DRB-HICOM is already the distributor of GM vehicles in Malaysia.

After signing the joint venture, the two companies launched the Chevrolet Aveo, a 1400cc sedan aimed at capturing the young executive market. A basic model costs 69,888 ringgit (US$19,968, euro14,620).

General Motors has expressed interest in an alliance with Malaysian national carmaker Proton, which is actively in talks with Germany's Volkswagen AG (other-otc: VLKAF.PK - news - people ) as it searches for a foreign partner to turn it around.

Volkswagen is seen as the front-runner in the Proton bid, but some officials have previously said GM may partner DRB-HICOM to boost its chances.

Gaining a stake in Proton could help GM - which already has operations in Thailand, South Korea, India and China - consolidate its position as a key player in Asia's booming automotive market, analysts have said.

ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Thailand, Singapore and Vietnam and comprises a community of 550 million people.

source:
Forbes.com

[nadepalma]

Volkswagen is seen as the front-runner in the Proton bid, but some officials have previously said GM may partner DRB-HICOM to boost its chances.

Does this mean that GM partnering with DRB-HICOM will help GM boost it's chances of taking a stake in Proton?

I would have liked to have seen GM take a stake in the company --- but if the plans fall through, I wonder if GM can expand this cooperation with DRB-HICOM to create an entire range of vehicles locally?

I also wonder what GM will do with this partnership if GM's bid for Proton is successful? Interesting...

A tangent/side note: someone tell this company the virtues of "branding" and to come up with a more simplistic and easily recognizable name for God's sake!

[LAMRONH1]

Meanwhile, south of zee border:


EL SALVADOR
Grupo Poma, a Salvadoran conglomerate, expects to sell 100,000 Chinese-made Cherry cars in Central America this year and another 300,000 next year, company officials said in August.

[Tequilujan]

Wouldn't it be funny if they got the Trio of mini cars?

[K-1]

Originally Posted by NINETY_EIGHT_REGENCY

After signing the joint venture, the two companies launched the Chevrolet Aveo, a 1400cc sedan aimed at capturing the young executive market. A basic model costs 69,888 ringgit (US$19,968, euro14,620).

These "young executive"s don't aspire to much, do they?

[1999 White C5 Coupe]

Will these Chevrolets be advertised as, "An American Revolution!"?

[Havasavana]

We know they won't be selling Silverados and Suburbans there, so how about using NA competence and facilities to design world class drive trains and build cars where they can be made profitably and that will sell where they can be sold. Isn't this what Toyota does? I don't see that repeating the Aveo process is going to win even in the intermediate term.

[nadepalma]

Originally Posted by 1999 White C5 Coupe

Will these Chevrolets be advertised as, "An American Revolution!"?

No -- it will be just "A Revolution" !

[Ming]

Originally Posted by Havasavana

I don't see that repeating the Aveo process is going to win even in the intermediate term.

Have you missed the huge sales growth of Chevrolet Europe due to GM Daewoo product? GM Daewoo is a part of GM, why re-invent the wheel here, especially when small, inexpensive cars are not something Lutz and Co. seem to want to sell here anyway (much less build here)?

[xPUMPx]

those exchange rates sure end up looking screwy when they get posted, 20k for a 1.4 litre Aveo?

[HEVguy]

IMO, the most important thing about these deals, is that GM is pursuing low cost manufacturing bases OUTSIDE CHINA. If they were putting all their eggs in the 'China basket,' I'd be more concerned. Of course, relative to manufacturing capacity, maybe most of their eggs are still going into China? However, it is good that they are continuing to explore other low cost options in Asia. I think if anything this will help stabilize Chinese stances in the long run (not that they are currently unstable for auto manufacturing, but they could tend toward more turmoil as some 'independent' Chinese autos mature).

[GM-10]

GM seems to be setting up an interesting holding company structure.

[t-rex]

DRB Hicom have been selling Daewoo and Holden-based Chevrolets in Malaysia for a few years now. Only up to now they've all been imported.

Back between 1967 and 1980 (ish) the Capital Motor Assemblies group assembled various Opels, namely the Rekord and Kadett/Gemini for the Malaysian market.

[Havasavana]

Originally Posted by Ming

Have you missed the huge sales growth of Chevrolet Europe due to GM Daewoo product? GM Daewoo is a part of GM, why re-invent the wheel here, especially when small, inexpensive cars are not something Lutz and Co. seem to want to sell here anyway (much less build here)?

No I haven't missed it, but I wonder what the future holds. I really don't know anything about that market, and the only Daewoo product I've seen is the Aveo, and I've seen what I think will happen to it when the Fit inventory meets demand, along with the Yaris. Many uncomplimentary comments have been made here about the engine in the Aveo and the MPG that it has. I understand that GM is pumping tons of money into Daewoo, and great things might come of that, or not. But surely more drivetrain expertise and better design facilities exist within GM in NA and Europe, and I can't imagine that that can't be used to advantage worldwide. I'm a GM supporter ONLY because they provide jobs and benefits here, and they have good products. Honda, my first choice, and Toyota also have good products and provide jobs here. I leave Ford out because I'm afraid they won't make it. I'll buy a Honda built in the US before a GM or Ford built elsewhere; no contest. Just my 2 cents.

[Minnesota Nice]

I don't mind this. More power to them.

My issue is that I want the cars sold in America to be made in America, ideally.

If it is sold elsewhere, I don't care where it is made.