SINGAPORE -- Boosting the city-state's status as a regional business hub, General Motors (IW 500/ 5) said Wednesday it would move the headquarters of its international operations to Singapore from Shanghai, boosting the city-state's status as a regional business hub.
The new headquarters "will oversee key parts" of GM's business in Africa, Southeast Asia, Australia and New Zealand, India, South Korea and the Middle East as well as Chevrolet and Cadillac in Europe.
There will be 120 employees in Singapore. GM will keep 250 employees in Shanghai and 245 in Seoul.
GM said the move would allow it to focus on China, the world's biggest vehicle market, while strengthening its presence in other countries in the region.
The Singapore headquarters will "lead the company's umbrella strategy for the region," GM said.
It said Singapore offers several advantages, including "greater proximity" to key international markets like Southeast Asia and India, the Middle East and Africa.
"We are heartened that GM has chosen to set up its international headquarters," said Lim Kok Kiang, an assistant managing director at Singapore's Economic Development Board.
Kelly Teoh, market strategist at IG Markets in Singapore, said the move signalld a growing perception that the city-state was "trumping" Shanghai and Hong Kong as the preferred location for regional offices.
"Singapore is now being seen not only as a purely Southeast Asian hub, but also an Asian hub with wide networks," Teoh said.
Singapore's clear regulatory framework and low corporate and personal income taxes also made it favorable for multinational corporations, she said.
The decision "reflects Singapore's strong competitive advantage as the Asia-Pacific's leading headquartering hub for management functions", said Rajiv Biswas, regional chief economist at global consultancy IHS.
"However GM will remain strongly committed to its production operations in China, which has become the world's largest auto market since 2010," he said.
But while GM further cements its presence in China, it must also gain market share in other Asia-Pacific markets such as Indonesia, India and Vietnam which are forecast to grow strongly in the next decade, Biswas said.
Singapore hosts thousands of multinational corporations which have set up regional or global operations.
Shanghai has sought for several years to lure foreign companies by offering financial subsidies which effectively reduce their tax payments. In the latest push to attract foreign investment, China established a free trade zone in Shanghai in late September, pledging to make doing business easier.
By the end of August, more than 400 multinational companies had set up their regional headquarters in Shanghai, local government figures showed.
China is crucially important for foreign car companies in the face of weak demand elsewhere, especially in Europe.
China is GM's largest overseas market, with the firm selling around 2.8 million vehicles in the country in 2012. GM has 12 joint ventures and two wholly-owned companies in China, employing 55,000 people.
Copyright Agence France-Presse, 2013