General Motors Corp expects no major changes in its investment plans for Asia Pacific in the next few years although it is cutting back on non-essential projects, its president for the region said on December 23.
GM and Chrysler LLC have signed loan agreements with the US government that will provide the struggling automakers with up to $17.4 billion in emergency loans to help them avert a collapse as they reel from a slump in consumer demand.
"We are clearly in a position of making sure we conserve cash," Nick Reilly told Reuters in a phone interview. "We have deferred non-essential investments, maybe six months or 12 months in some cases...but our investment plan is still on track."
Reilly said earlier this year that GM expected to invest $3-4 billion in the Asia Pacific in the next three to four years. To cut inventory level due to falling overseas exports from South Korea, especially to Europe, GM is shutting down production there through to the second week of January, he said.
GM Thailand announced last month that its 130,000-unit-a-year factory at Rayong would also close for two months from Mid-December and it would cut 258 jobs at the plant.
In China, where the Detroit automaker last week opened a new car manufacturing plant jointly with its partner SAIC Motor Corp, Reilly said he saw no need to lay off staff. The plant, based in the north-eastern city of Shenyang, will start mass production of Chevrolet Cruze compact cars in the second quarter next year, adding to a line-up of new models it will roll out in China in 2009.
However, GM would not add new vehicle manufacturing facilities in the country, where its total capacity is at roughly 1 million units, in the next couple of years, he added. After years of double-digit growth, China posted three rare monthly declines in car sales since August as a slowing economy curbed demand.
Reilly said he expected to see year-on-year declines probably in single digits in the first half of 2009, but the market may recover mildly through government initiatives to boost the economy.
Beijing unveiled a $584 billion fiscal stimulus plan recently and may cut vehicle purchase tax for passenger cars. GM's vehicle sales in the country, its second-largest market outside the United States, were nearly 1 million in the first eleven months. Sales are expected to be "significantly" over 1 million units in 2008 and will slightly outperform the market in 2009, he said.
The US automaker sold 1.03 million vehicles in the country last year, up 18.5 percent from a year earlier.
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