After much speculation, General Motors has made the announcement to cease its operations in Thailand, including selling off their factory in Rayong just east of Bangkok. That's the place where they make their two strongest Chevrolet models: the Colorado pick-up and the Trailblazer 7-seat SUV.

We were seeing signs that there were problems with General Motors in Southeast Asia. Sales were dropping as the Chevrolet Colorado and Trailblazer were both aging models. Unable to compete with newer generation rivals from Toyota, Mitsubishi, Nissan and Ford, sales understandably took a hit, and the first indicator was GM announcing that they will be pulling out of Indonesia. One of the reasons was the failure of the Chevrolet Spin, a small Avanza-like MPV, to succeed. A year prior, their distributor announced that they were ceasing sales of Chevrolet in Malaysia too.

Our neighbor to the southwest is a larger market than ours, but Chevrolet only sold only 970 vehicles from January to September 2019. That's a 48.6 percent plummet in sales compared to the same period in 2018, and a dismal performance compared to the over 750,000 total vehicle sales for Jan-Sept 2019.

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The Thailand pullout decision was probably closely linked with the fact that they no longer have a development partner for the pick-up platform, which in turn also deprives them of a partner for the SUV version. The current Colorado was developed together with Isuzu, but the Japanese diesel specialist decided to file for divorce and remarry to build a new D-Max, this time with Mazda. Late last year, they revealed the new generation D-Max, but Chevrolet didn't reveal any competitors nor are there signs or spy shots that we know of that they were developing a new product.

With no new pick-up product on the horizon in a region that loves pick-ups means there's no real use for a factory, and so they sold it to China's Great Wall Motors which has ambitious plans to expand the “Great Wall”.

With GM practically leaving SE Asia, what next for Chevrolet PH? image

Analyzing what happened with Chevrolet and GM in our neighbors also forces us to look at what's happening within our market for the brand. Our situation is a bit different because Chevrolet Philippines, under The Covenant Car Company, Inc. (TCCCI), is a distributor and not a subsidiary of General Motors. GM was in the Philippines as an official company, but they pulled out towards the end of the 2000s and appointed TCCCI as the distributor.

Yesterday, following the news about the pullout from Thailand, GM Southeast Asia released a statement that they remain committed to the Philippine market and that TCCCI will remain their partner in the country. GM Southeast Asia president Hector Villareal also stated that they “will continue working with partners at TCCCI to grow Chevrolet in the Philippines.”

Dissecting his statement is quite tricky because Chevrolet's Philippine sales, much like our neighbors, have also been dropping. From a peak of 8,000+ units sold in 2014 undoubtedly driven by the then-new Trailblazer, Chevrolet's numbers kept dropping when faced with stiff competition from other brands that launched newer PPVs/SUVs. In 2019, Chevrolet sold just 3,175 units; that number is much less than half of what sales were 5 years prior.

But now that the Thai factory is closing, what about us?

For starters, Chevrolet says the Philippines, like Thailand and Indonesia, will continue to receive parts. Villareal said that aftersales will continue and spare parts will not be interrupted for existing customers. That means they'll still continue to have their parts suppliers working to deliver the components their customers need.

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With regards to vehicle models, the Philippines is fairly unique in South East Asia; while the bigger markets such as Thailand, Malaysia, and Indonesia have the steering wheel on the right side, we have ours on the left. Vietnam is the other major SEA market that has the steering wheel on the left.

Being LHD in a predominantly RHD region is generally a disadvantage. It means that models take more time to be launched in our market compared to our RHD neighbors; just count the months or even years between the premiere in Thailand compared to the launch in the Philippines of any model and you'll see what we mean. Manufacturers usually have to adjust production schedules for models and swap out parts bins between models for RHD and LHD.

Also, the lower sales and production volumes of LHD models mean that the economies of scale are -theoretically- not as big as RHD. That also has the implication that the Philippines is an unfavorable base to produce cars from to export to the ASEAN and take advantage of the free trade area.

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In the case of Chevrolet in the Philippines, however, the cessation of production in their last ASEAN hub is not so much a problem, but more of an unshackling. For months since Indonesia announced they were ceasing operations this year, we've been pestering asking them what will happen. They've always kept mum about it, but it seems they've been planning for this all along.

While Chevrolet Philippines can source their models from the U.S., that's mostly reserved for high-end vehicles because of the huge taxes and duties involved. That's why the Suburban, Tahoe, Camaro and Corvette (yes, they plan to launch the new mid-engine 'Vette) are so expensive. They also source from Korea, but they haven't had as much mainstream success.

Which leaves us to this conclusion: their next big source for models will likely be China.

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There are a few factors for this. The People's Republic, like the Philippines, is a country that has the steering wheel on the left; that means we can drive their models once those have been certified for our use with our fuel. There is also the ASEAN China Free Trade Area which is great for keeping prices down, but that means vehicles will likely be limited to 1.5-liters of displacement or smaller as stipulated in the terms of the ACFTA.

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It's the logical thing to do, and we've already been seeing it with other brands as they shift to China-made models and the entry of new Chinese brands into the Philippines. It is worthy to point out that there are widely varying degrees of success though; some brands struggled once they shifted to Chinese automobiles while some succeeded with Chinese brands. Incidentally, the same distributor of Chevrolet is also the distributor of Chinese-owned MG.

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Now that's important, and we can think of three key reasons why. One is that TCCCI is already familiarized with the process of bringing in Chinese automobiles. Another is that they're enjoying quite a bit of success when they took over MG from its previous (but supposedly not-exactly-official) distributor; they actually sold over 5000 MGs in 2019, far more than Chevrolet and good enough to get the brand into the top 10 in the Philippine industry. The third, and perhaps the most important, is the strong Chinese connection between MG and Chevrolet, or at least General Motors.

MG, or Morris Garages, may be a British brand, but it's now owned by Shanghai Automotive Industry Corporation, otherwise known as SAIC Motor. General Motors isn't Chinese owned by any means, but SAIC is the joint venture partner of the American automaker, otherwise known as SAIC-GM. While there are going to be differences, it stands to reason that TCCCI is already well versed in dealing with SAIC, and from what we hear from TCCCI, their Chinese counterparts are very happy with the performance of MG in the Philippines.

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SAIC already has a very good foothold in the Philippine market. We already mentioned MG, but there are other SAIC models with other brands, most of which are with the Ayala group. Volkswagen's new direction with Chinese models is courtesy of SAIC-Volkswagen; the major Volkswagen joint venture there. Van specialist Maxus (also with Ayala group) is a SAIC brand too.

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Chevrolet Philippines is actually already offering a SAIC-GM model before, and that's the Sail 4-door sedan. They aren't selling too much of them owing to the strength of competitor models, but we don't think they were expecting much volume anyway. Nevertheless, there are a lot of passenger car models from SAIC-GM like a long-wheelbase Malibu, the Cruze, and the new Chevrolet Monza; the last one actually looks very interesting.

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What we think they'll be banking on more strongly is the crossover SUV lineup from SAIC-GM. They have the Trax, but there are a lot of other interesting crossovers under the SAIC-GM banner. There's the Chevrolet Tracker which is about the size of an EcoSport, and it comes powered by small turbo engines; either 1.0L or 1.3L. They have a new generation Chevrolet Captiva which is based on the Baojun 530.

We can also check out the China-market Chevrolet Trailblazer. But this one isn't the same as the one from Thailand; this one is a 5-seat crossover that's about the same size as a Subaru XV/Crosstrek. It's powered by either a turbo 1.2-liter or a turbo 1.35-liter engine.

With GM practically leaving SE Asia, what next for Chevrolet PH? image

SAIC-GM also has other GM brands like Buick and Cadillac. Yes, those brands are rather interesting too, but we don't expect Buick and Cadillac to come in via China. TCCCI executives did tell us that they were already looking at Cadillac but from the United States. That makes sense, especially with a new generation Escalade.

Offering the SUV line from SAIC-GM is the logical move, and follows the trend that other car manufacturers are working towards more SUVs and only a few passenger cars. They could even follow what Ford did and not bother with saloons and hatchbacks anymore, apart from the halo models.

With GM practically leaving SE Asia, what next for Chevrolet PH? image

Hey, we're still guessing here, but we're seeing a lot of indicators that this is the way things could be for Chevrolet in the Philippines. And we can toss in the human factor: we asked TCCCI executives about the problems the brand has had in Southeast Asia, but they didn't seem to be all too worried. Consider that poker tells that TCCCI may have already had a plan in place well before these announcements from GM about shutting down factories and sales operations in a variety of ASEAN markets.

Can Chevrolet succeed with Chinese made SUVs and cars if they do go that route? We'll have to wait and see, but we know they can be offered for very good prices, and judging from their good fortunes with another brand that we prematurely wrote off years ago in the country (read: MG), the TCCCI just might have the right foundations in place to make it happen and turn the bowtie around.