General Motors said on Friday that it would phase out production of its Chevrolet Sonic cars in Thailand by midyear and lay off workers at its Rayong factory.
The announcement came a day after the US-based automaker said that it would stop making GM-branded cars in Indonesia.
While GM will still sell cars such as the Chevrolet Cruze sedan in parts of Southeast Asia, it is shifting its focus to push its sport-utility vehicles and pickups such as the Trailblazer and Colorado.
The company also said it would withdraw its participation in Thailand's eco-car Phase 2 programme.
"GM is focused on becoming a more customer-focused and operationally efficient company," said Tim Zimmerman, president of GM Southeast Asia Operations. "We must accelerate the transformation of our operations in Southeast Asia, particularly Thailand given the sluggish domestic market demand."
The restructuring — under executive vice-president Stefan Jacoby, who oversees markets beyond the Americas, Europe and China — marks a retrenchment in Asia by General Motors.
While business grows in China, the world's biggest car market, GM has struggled in other parts of its international operations unit, which does not include China.
The company has signalled overall restructuring charges of US$700 million this year and said last month that it expected an improved consolidated operating performance from Mr Jacoby’s international operations unit.
The factory in Rayong will be scaled down from its current annual capacity of 180,000 vehicles.
The company did not elaborate but said it would initiate a "voluntary separation programme" for staff. In total, GM employs 3,200 people in Thailand.
In Indonesia, GM on Thursday said it would stop making the Chevrolet Spin by the end of June and close a factory in Bekasi, just outside Jakarta, that employs 500 people.
After 80 years in Indonesia, GM's market share is below 1%, according to the consultancy LMC Automotive. It sold fewer than 11,000 vehicles there last year, while Toyota sold more than 578,000.
Toyota and other Japanese makers together control more than 90% of the Indonesian market.
Mr Jacoby acknowledged that GM got it wrong in going head-to-head with the Japanese in a market he dubs their "backyard".
The Spin, a strategic, small "people mover" van that has done well in Brazil, was too costly to make to be profitable in Indonesia, as most of the parts had to be imported.
"We could not ramp up Spin production to boost the volume as we had expected ,,, although the product was really good," Mr Jacoby said.
"The logistics chain of the Spin was too complex — we had low volume, so we could not localise the car accordingly, and from the cost point of view we were just not competitive."
In Thailand, GM sold close to 26,000 vehicles last year, giving it a 3% market share, said LMC Automotive, which put the combined market share of major Japanese rivals at more than 60%.
GM said it would phase out sales of the Spin and the Sonic in Thailand by June.
While GM is broadly repositioning the Chevrolet brand in parts of Southeast Asia, it is driving into Indonesia with its Chinese partners including SAIC Motor Corporation.
"They plan to set up a manufacturing facility near Jakarta for their no-frills Wuling brand but are not interested in taking over GM’s Bekasi plant," a source said.
The overhaul in Indonesia and Thailand follows GM's 2013 retreat from car production in Australia, and industry analysts now expect GM to restructure its manufacturing operations in South Korea, a big production hub for the US firm.
Susquehanna Financial Group analyst Matthew Stover said South Korea had shifted from a developing-market cost structure over the last 10 years to being almost as expensive for car production as Japan.
“I don’t think what’s happening in Korea is even close to [being] done. It’s the biggest problem,” he said.