What is GM’s current production capacity in Thailand? How much have you invested in facilities here?
APFEL: We can build 180,000 cars and trucks here in Thailand. We are making an investment in Indonesia right now that will add another 40,000 unit capacity. That is very much in line with our growth and sales. Last year, we grew 139% in Thailand and across the region. We outpaced the industry tremendously. If you look at the total investment in Thailand since 2000, when we began operations here, it amounts to about $1.4bn. Over the last 3-4 years, it amounts to about $600m of that $1.4bn. This includes a new initiative we have been working on in the region. We built an engine plant. We invested $200m to build our Duramax Diesel Engine that goes into the Colorado truck, and into the Trailblazer SUV.
What is your current market share here in Thailand? What are your goals for the next 3-5 years?
APFEL: We have actually grown in market share tremendously during the last 3-4 years. Traditionally, our market share, when we started with the Chevrolet brand 10 years ago, has been hovering in the 2% – 3% range. We have now approached the 6% range in Thailand. We want to reproduce that across the region. We are targeting the Indonesian market with the new Chevrolet Spin. We expect our market share to approach the level it is in Thailand in Indonesia as well as in countries like Laos and Cambodia, where we appointed a new distributor. We see a lot of good things happening. Our operation with our distributor in the Philippines has been very successful. For two years in a row, they have won the J.D. Power Customer Satisfaction #1 ranking. There is product as well as service. We are focusing a lot on upgrading our dealerships and making sure customers want to deal with us. We want to meet transportation needs. We are the people you want to be with. That is what all our dealerships need to do. It is an ownership and a service experience. We are not only about the good deal. We offer a competitively priced product that is really great, and brings technology to our customers. We offer something that goes beyond the sale.
To what extent will Thai Baht appreciation affect GM’s business here?
APFEL: If the appreciation of the Baht is a reflection of the economy, this is a good thing. It means the economy is continuing to grow and prosper. Usually, the percentage of people owning a vehicle moves in line with the appreciation of the per capita GDP. This is a good-news story. We also export and import parts. There are a number of factors that play a role in this. So far, we have seen good things happen to the Chevrolet brand and to General Motors. We expect to continue that on the strength of the portfolio, the strength of a great dealer network, and a great team.
How serious is the concern regarding the labour supply here in Thailand?
APFEL: We have an unemployment rate of 0.6%. I do not know of any other country that has a comparable rate. This must be taken with a grain of salt. Not every employment is an efficient, full time, employment. Not every employment is paid very well. For a large company like General Motors, that has great pay, benefits, and a safe workplace, we see people gravitating towards the company. We see that our attrition rates are far lower than the industry standard. The retention rate of our hourly workers is 96%. This speaks highly to General Motors and Chevrolet as a workplace of choice. On the other hand, we are concerned with more than ourselves. We have 178 suppliers in this country. We know they are battling with the labour issue. They are trying to attract skilled technicians and skilled workers. The supply does not keep up with the increasing demand. We also know that our dealers in Thailand alone want to hire 200 additional mechanics this year. We have just signed an MOU with the Ministry of Education, where we will be sponsoring 10 technical schools around the country. We will be building mini workshops that look like a Chevrolet service center at a dealership. We will put vehicles there along with the latest technology, diagnostic instruments, and manuals explaining how to repair and service vehicles. We will be training people. This isn’t anything new. We are already channeling 700 students through this program annually. We will be increasing our efforts. This will be a great tool to recruit, as well as give back to the country.
What is your future outlook for Thailand’s automotive industry?
APFEL: There is going to be steady growth. Indonesia’s growth has a steeper trajectory. Indonesia will outpace Thailand either this year or next year. That is the big development. We saw a record number last year with 2m cars produced, and 1.4m sold in-country in Thailand. Those were due to two special effects. The first was a catch-up for the lost 6-month period due to the 2011 floods. The second was due to the government stimulus, a first car buyer program. If you look at the last 5 months of the year, this was not a natural effect. In 2013, we believe the industry will drop. I do not expect it to be more than 1.2m. We will see from there. There will be continuous growth. The whole region is going to grow. It is a good place to be and a good place for investment. It will be a good place to meet your customer and their needs.
General Motors (GM) ASEAN CEO Martin Apfel on GM’s growth in Thailand is originally published by and copyright of The Prospect Group.
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