Joint Venture Proposal for AutoThai Corperation

Submitted by General Motors Corporation

Why General Motors Corporation?

1. Market Leader.

General Motors has the largest market share of cars and trucks worldwide. We are also the world~s largest producer.

General Motors is the leading car and truck producer in the US, which is widely regarded as the most competitive and the largest single market.

GM is the biggest company in the world in terms of revenue.

2. Variety of Products

GM has the largest number of brands of any company:

We also own SAAB and are the largest shareholder of Isuzu.
Therefore, we can meet all of your current and future product needs.

3. Quality Products

GM has secured a #1 ranking among top ten volume manufacturers in overall customer satisfaction on the prestigious J.D. Power Early Buyer Survey for cars and trucks in the US. This award is particularly important considering that the US is widely regarded as the most open, most competitive, and least profitable market in the world.

4. Proven Track Record Internationally

GM sells cars and trucks in 170 countries and has manufacturing, assembly, or component operations in over 50 countries.

We have the largest global reach of any automotive manufacturer.

*We have a successful on-going joint venture with Toyota

-We have joint manufacturing operations in the US that currently produce Geo cars and trucks.
-As a result of this venture, GM can utilize the expertise of Asia~s largest and one of the world~s biggest car and truck producers, Toyota.

5. Environmentally Conscious

GM is concerned about our world~s future. We have developed the GM Impact, an electric vehicle, that is slated to go into mass production in the near future. It would be the first such electric vehicle that would be competitive with gasoline-powered cars and the first is going to be produced in volume quantities.

Currently, GM has one of the world~s most efficient cars in the Geo Metro. This economical car is rated as having the highest gas mileage by the Envioronmental Protection Agency (EPA), a US federal government agency.

6. Offering a range of significant related services

~ Delphi Automotive Operations:

* A major company within GM. It is the leading producer of automotive components.
* It has over $25 billion dollars in revenue and as such would be well-positioned to help develop China~s automotive components industry.

~ Hughes Electronics:

* Innovator in advanced technology products and services
* A leading provider of satellite services
* A competitive producer of aircraft

~ Close relationship with Electronic Data Services (EDS):

* EDS is a leading provider of informational technology services.
* EDS would be able to provide your company and China's automotive industry with the necessary expertise and know-how to develop their informational technology infrastructure.

~ General Motors Acceptance Corporation

* An important part of any car manufacturing operations is the financing arm. As the largest company in the world, GM has unmatched financial resources to provide for such necessities as car leasing.
* GM, through its Motors Insurance Corp., offers a complete family of insurance products, including vehicle, homeowners, and commercial insurance coverages, which are particularly important because recent surveys have shown that over 80% of vehicles purchased in China have been by businesses or government.
* As a major employer and a major player in the development of the infrastructure of our community, GM, through GMAC Mortgage Group, offering residential and commercial mortgages, home equity loans, and mortgage-backed securities provides greater opportunity for growing the market of consumers who can afford our vehicles.

Our Proposed Car

The 1996 Chevrolet Lumina Passenger Minivan fulfills all the characteristics desired by your RFP. The 7 passenger Minivan offers reliability, confort, affordability, is relatively fuel efficient and ecological.

1. Low Maintenance and Reliable

The Chevrolet Lumina Minivan would enjoy the same full-service warranty as it is offered in the US We offer such a long warranty to demonstrate that we believe in the quality and engineering of our products. Fiberglass-like plastic body panels, bonded to a steel space frame, mean no rust worries. Acceleration is outstanding with the new standard 180-horsepower, 3.4-liter V-6 engine, not only from a standing start but when merging and passing. Upshifts are quick and barely discernible with the electronically-controlled four-speed automatic.


2. Low Cost:

The Chevrolet Lumina front total cost of production is $17,404.

3. Safety

The Chevrolet Lumina Minivan is engineered with safety and confort in mind. The van absorbs bumps capably, almost gliding past a lot of them. A driver's airbag and anti-lock braking are standard. In keeping with Chevy's family focus, integral child seats are available.


Four-Wheel Anti-Lock Brakes: Standard

Driver Air Bag: Standard

Integrated Child Seat: Optional

Crash Test Results as rated by the National Highway and Traffic Safety Association, a US Federal governmental department

Driver: Rating = good
Passenger: Rating = average

4. Fuel Economic and High Mileage:

Fuel Tank Capacity: 20 gal.
EPA Mileage Estimates:
Manual: City = NA Highway = NA
Automatic: City = 19 mpg Highway = 26 mpg
Range in Miles:
Manual: City = NA Highway = NA
Automatic: City = 380 mi. Highway = 520 mi.

Note: This proposed minivan is equipped with a very powerful V-6 engine, the most powerful standard engine on any minivan. Such a minivan is ideal for large families and small businesses. A less powerful engine could be substituted to improve fuel economy if necessary.

5. Performance and Standard Features:






Plant Yearly Production Capacity

First, GM accepts an initial capacity of 50,000 cars per year and a restriction to triple capacity through the first five years. We want to clarify that GM reserves the option to increase capacity.

Second, the initial export restriction limit of 25% is agreeable for the first year. However, GM would like to reserve the option to increase exports beyond that percentage for future years.

Type of Ownership

It is GM~s understanding that this contractual joint venture will result in the formation of a private limited liability company.

Board of Directors

7 seats GM
3 seats AutoThai

This structure is optimal because of GM's greater expertise and experience in automotive manufacturing. A GM majority in the Board of Directors will allow GM to choose management to optimize both production and profitability. Also, GM must have day-to-day control over management of operations of the plant.


GM agrees to the capital structure suggested of 50% equity and 50% debt. GM agrees to finance 70% of the equity with AutoThai financing the remainder. The remaining debt will be borrowed by the new joint venture and will be backed by the full faith and credit of the Thailand government.

Tax and other incentives

GM believes that an 8 year tax holiday from corporate income tax is necessary to allow this joint venture to become economically stabile and eventually profitable. GM also understands that losses will be allowed to be carried forward and deducted as expenses for five years after the tax holiday.

Plant Location

Since the Thailand government wishes to develop a car manufacturing industry, then it would be in their best interests to grant a free trade zone in a city of your choice with access to seaports.

Amendments to the RFP:

Repatriation of Profits:

GM will be allowed the option to repatriate all of its profits at any time.

Dispute Settlement Forum:

Any and all disputes will be settled under US courts and laws.

Nondisclosure Agreements:

AutoThai agrees to a nondisclosure agreement stating that they will not reveal any sensitive GM technical or product knowledge. Non-Competitive Agreeements AutoThai agrees to a noncompetitive agreement stating that they will not enter into the Thailand car market for a period of five years following any break-up of this joint venture with GM.

Furthermore, the joint venture with GM will be exclusive. AutoThai agrees that they will not enter into any kind of information sharing or any type of joint venture with any other joint venture with any other auto manufacturer.


GM Team

Copyright 1996, GM Team Designed and Maintained by Zan Kuang.