UPDATE 1-GM to spend $455 mln on Thai expansion

(Recasts adding quotes, detail)

By Vithoon Amorn

BANGKOK, Jan 29 (BestGrowthStock) – General Motors Corp [GM.UL]
announced plans on Friday to spend 15 billion baht ($455
million) in Thailand over the next two years, reviving plans
for a new diesel-engine plant and retooling existing production
lines.

The expansion at its existing plant in Thailand’s Rayong
Province, a region dubbed “the Detroit of Asia” for its large
concentration of global carmakers, will be financed by 13.5
billion baht local syndicated loan, GM executives said.

The rest will be provided through injection of equity by
the Detroit automaker to its wholly owned Thai unit,

Bangkok Bank (BBL.BL: ), Siam Commercial Bank (SCB.BK: ) and
Tisco Bank (TISCO.BK: ) signed contracts pledging to provide GM
(Thailand) Ltd the credit line.

GM executives said the company would spend $150 million
building a diesel-engine plant with a 106,000-unit annual
capacity and another $330 million retooling the plant’s
machinery.

“After the retooling process needed for our next generation
pick-up trucks and special utility vehicles, our annual
capacity would be around 120,000 units,” Steve Carlisle, GM
chief executive for South East Asia, said.

GM had shelved the diesel engine project in late 2008 after
the global financial crisis forced its Detroit head office to
seek a U.S. government bailout.

With the downturn of the auto industry in 2008 and 2009,
GM’s Thai car and truck output plunged to around 40,000 units
in 2009 from 104,000 a year earlier.

Industry data showed GM sold 15,111 vehicles in Thailand in
2009, down from 22,204 in 2008. GM executives said on Friday
they expected the recovering auto sector would help raise its
output to about 60,000 units this year, of which about 60-70
percent are to be exported.

Tim Lee, Shanghai-based president of GM operations outside
the United States and the European Union, told Reuters his firm
and its Chinese joint venture partners expected to sell over
two million vehicles in China this year, up from 1.83 million
in 2009.

“China’s recent decision to curb bank loans has not yet
affected our business and we are prepared to participate in the
industry’s further growth in this big market,” Lee said.

China is the world biggest auto market with total vehicle
sales of 13.6 million units in 2009.

($1 = 33.00 baht)

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(Editing by Jason Szep)

UPDATE 1-GM to spend $455 mln on Thai expansion