GM to terminate partnership with DRB-HICOM

A follow up to an earlier post about the Cruze's delay, well we now know the reason. Seems that GM's local operations is in a big mess and word around is that various business partners of Hicom-Chevrolet Sdn. Bhd. (HCSB) is having difficulty recovering debt from HCSB. Rumour is also rife that GM is considering to terminate its current joint venture with local partner DRB-Hicom.

According to Business Times,
General Motors Corp (GM) has ended its agreement with DRB-HICOM Bhd for the exclusive distribution of Chevrolet vehicles in Malaysia effective August 31, sources said.

DRB-HICOM also faces the risk of losing its job as the local Chevrolet importer as GM is scouting for a replacement, they added.

The US carmaker, sources said, is now talking to the Naza group to handle both the import and distribution of Chevrolet.

In the interim, GM has turned to listed Permaju Industries Bhd's outfit Cergazam Sdn Bhd to manage the franchise from DRB-HICOM.

DRB-HICOM however quickly denied the report, insisting that talks are still on going. Again, according to Business Times, 
DRB-HICOM Bhd has denied a report that General Motors Asia Pacific Holding Co LLC (GMAP), a wholly-owned subsidiary of General Motors Corp (GM), had terminated its agreement with the company for the exclusive distribution of Chevrolet vehicles in Malaysia.

Of course, nobody is taking the statement seriously.

DRB-HICOM is not only a local partner for GM but also for Honda, as it owns 34% of Honda Malaysia. DRB-HICOM have never easy relationship with GM's Chevrolet brand. Previously, Chevy cars were distributed by DRB-Hicom's subsidiary Hicomobil (who seriously damaged Chevrolet's brand value when it disposed off its remaining stock at fire sale prices just prior to their termination).

Complications with the usual local political bull crap has allowed DRB-HICOM to also sell parallel imported Honda vehicles - the Elysion and Stepwgn. I don't know how well does this go down with Honda Motor Co., but there is nothing much that they can do. No car manufacturer will sit by idly when its local JV partner is selling parallel imported vehicles with no proper after-sales support structure that matches their brand reputation as a whole. 

Cergazan and the Naza Group have been rumoured to be in talks with GM to take over the distributorship rights. Cergazam is the current master dealer of Chevrolet and a motor trading arm of timber and logging industry giant Permaju Industries.