GM to transfer Vietnam operation to Vingroup's car arm,
eyes sales boost
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 [June 28, 2018]
By Mai Nguyen
HANOI (Reuters) - General Motors <GM.N> has
agreed to transfer its Vietnamese operation to VinFast Trading and
Production LLC and distribute Chevrolet cars through the local carmaker,
in a move that could help drive up its modest sales in the country.
The U.S. automaker will transfer full ownership of its Hanoi factory to
VinFast for the Vietnamese firm to produce small cars under a GM global
license from 2019, the companies said in a statement on Thursday,
without disclosing a value for the deal.
As part of the deal, VinFast, a unit of Vietnam's biggest private
conglomerate - Vingroup JSC <VIC.HM>, will be the exclusive distributor
of the Chevrolet in Vietnam.
"The GM-VinFast strategic partnership will best position the Chevrolet
brand and dealer network for long-term growth in Vietnam by leveraging
GM's global scale and expertise, married with VinFast's domestic
strength and insight," said Barry Engle, executive vice president and
president of GM International.
The transfer, which includes GM's Hanoi plant, dealer network and
employee base, is expected to be conducted by the end of 2018, the
companies said in the statement.
GM used its Hanoi plant to assemble Chevrolets with parts imported from
South Korea - a country where the U.S. automaker came close to
bankruptcy as it struggled to turn around its debt-laden unit. GM Korea
is GM's biggest production base in Asia excluding China.
The plant will be used solely to produce VinFast cars after the
transfer, while Chevrolet cars will be imported.
VinFast said this partnership with GM was "integral" to its plan to
"launch a portfolio of five VinFast vehicles in 2019".
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The GM logo is seen at
the General Motors headquarters in Sao Caetano do Sul, Brazil March
13, 2018. REUTERS/Leonardo Benassatto
It is building a $1.5 billion factory in the northern province of Hai Phong and
plans to launch a sedan and sport-utility vehicle in the third quarter of 2019,
and a small car, electric car and electric bus by end-2019.
"Our vision is to build an automobile manufacturing eco-system that will include
assembly plants, local automotive suppliers and dealers, and a string of
supporting industries," said VinFast CEO Jim DeLuca.
Vietnam's automobile sales grew 24 percent in 2016 but fell 10 percent last year
to 272,750 units, data from the Vietnam Automobile Manufacturers' Association (VAMA)
showed. Sales fell 6 percent in the first five months of 2018.
While GM's sales in Vietnam have been rising since 2014, its numbers last year
were only an eighth of the country's market leader, local Truong Hai Auto Corp,
and a sixth of runner up Japanese rival Toyota Motor Corp <7203.T>, VAMA data
showed.
Sales of the Chevrolet, the only vehicle GM offers in Vietnam, grew 8.5 percent
to 10,576 units in 2017, lagging gains of 34.5 percent in Indonesia and 25.7
percent in Thailand.
(Reporting by Mai Nguyen, Editing by Christopher Cushing and Himani Sarkar)
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