Monday, October 26, 2020

Chinese giant Great Wall Motors signs deal to acquire GM's Rayong plant

Sep 30. 2020
Elliot Zhang, left, president, Great Wall Motors Asean and Thailand, and Joseph Urso, director of corporate development, Global Mergers & Acquisitions, GM International, pose after the signing ceremony.
Elliot Zhang, left, president, Great Wall Motors Asean and Thailand, and Joseph Urso, director of corporate development, Global Mergers & Acquisitions, GM International, pose after the signing ceremony.
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By The Nation

China-based Great Wall Motors (GWM) on Tuesday signed a share sale and purchase agreement with General Motors (GM) to acquire GM's production facilities in Rayong.

GWM aims to make Thailand its Asean production base for domestic sales and export of new energy vehicles and internal-combustion engine models.

GWM plans to begin production in the first quarter of 2021, as part of its vision to be a "Global Mobility Technology Company".

GWM's move to set up its production base in Thailand kicked off in February this year when the company started negotiations with GM to acquire, under a signed binding term sheet, GM Thailand and GM Powertrain Thailand legal entities, which include the Rayong vehicle assembly and powertrain facilities.

The two companies reached an agreement recently and officially signed the Share Sales and Purchase Agreement.

The Rayong plant will be the 11th full-scale automobile manufacturing base of GWM worldwide.

Elliot Zhang said that "while the Asean automotive industry is clearly on its growth trend, Thailand has strong fundamentals as a leader in this industry and is regarded as one of the world's best locations to establish an automobile production base, thanks to its readiness in terms of workforce and well-developed automotive ecosystem".

"Upon handover of assets as a result of the signing, this engine and vehicle production hub will be renovated and undergo system upgrades to become a smart factory by GWM's global standards for an automobile production hub. It will boast GWM's expertise and capability in SUV and pickup truck production, including advanced powertrain technologies, giving it the ability to produce internal combustion engine vehicles and electric vehicles such as hybrid electric vehicles, plug-in hybrid electric vehicles and battery electric vehicles."

GWM will also invest in production equipment and product research and development for Thai and Southeast Asian markets as well as skills development of the production workforce, the president said.

The Chinese company is expanding its business and brand presence across the world. Currently, the company has 10 research and development centres in seven countries and operates 15 factories worldwide where Thailand will be the latest addition.

The Thai production hub will become operational in the first quarter of 2021 with automobile production capacity of 80,000 units per annum.

In addition to bringing job opportunities to people and growth to the automotive supply chain, the new investment by GWM will contribute to R&D progress in support of Thailand's automotive industry development and help spur related industries to enable continued growth of the Thai economy at large, the company said.

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