BANGKOK (Bloomberg) -- General Motors Corp., the world’s largest automaker, said it will invest $445 million for a new diesel-engine factory in Thailand and to upgrade vehicle assembly facilities as it seeks to boost growth in Asia.

GM will set up a diesel engine plant in the country, its first in Southeast Asia, the automaker said in a statement on Wednesday.
The Thai investment extends Chief Executive Officer Rick Wagoner’s strategy of expanding in Asia-Pacific, where sales grew about 10 percent in the first half in contrast to slumping demand in the U.S. GM may be overtaken as the world’s largest automaker by Toyota Motor Corp. as the Detroit-based carmaker shuts plants in North America in the wake of a $15.5 billion second-quarter loss.
“GM needs Asian markets more than other automakers do to offset sluggish demand at home,” said Matthew Kong, associate director of Fitch Ratings in Beijing. “No automaker has an absolute advantage over each other with the rising competition in the Asian market.”
The diesel engine factory is scheduled to open in 2010 and will have a capacity to build 100,000 engines annually, the statement said. The facility will make 2.5-liter and 2.8-liter engines, it said.
“Thailand and the entire ASEAN region will play an important role in our company’s success,” Wagoner said at the event in Rayong province near Bangkok. “General Motors is intent on becoming an industry leader here in Thailand and across ASEAN,” he said, referring to the 10-member Association of Southeast Asian Nations.
------Toyota leads
The automaker fell further behind Toyota during the second quarter as a deteriorating U.S. market overshadowed gains overseas. GM dropped 5 percent to 2.29 million vehicles, while Toyota posted a preliminary increase of 1.8 percent to about 2.41 million. Demand in Asia and Latin America led GM to a 16 percent rise outside of Europe and North America.
GM said last month it plans to generate $4 billion to $7 billion by selling as-yet unidentified assets. The company may sell or shut down its Hummer SUV division as $4 a gallon gasoline cuts demand for heavy vehicles.
“We are getting some significant interest in Hummer and other assets,” Wagoner said on Wednesday. Asset sales are a “lengthy process,” Wagoner said.
GM said in June it plans to cut North American truck production capacity by 700,000 vehicles. That effort includes closing four plants that make pickups, SUVs and medium-duty trucks by 2010.
-------Outside U.S.
Wagoner has said the sales title is worth battling for. Six of every 10 new GM vehicles are now sold overseas as U.S. production shrinks.
“Sales outside of the U.S. are extremely important to GM right now,” said David Healy, an analyst at Burnham Securities Inc., based in Sierra Vista, Arizona. “It gets more important all the time.”
GM expects to sell as many as 1.2 million vehicles in China this year and boost sales in India to about 220,000 in a couple of years, Wagoner said Wednesday.
Sales in Asia-Pacific region gained 9.9 percent in the first half of the year to 798,000 vehicles. GM on Aug. 1 reported a quarterly loss of $15.5 billion, the third biggest in its 100-year history, because of plunging U.S. sales and the declining value of truck leases.
----Thai market
The company was profitable in both its European and Latin America-Africa-Middle East regions, posting a combined $465 million gain. GM’s loss ballooned to $9.3 billion in North America, from a loss of $88 million. In its Asia-Pacific region, GM lost $163 million after a profit of $280 million a year earlier.
Thailand is Asia’s fifth-largest automobile producer, according to research firm Global Insight Inc. The country produced 1.28 million vehicles in 2007 while sales were about 631,000, according to the research company.
Japan is Asia’s largest vehicle producer, followed by China, South Korea and India.
Thailand, Southeast Asia’s largest vehicle market, has lured investment from overseas automakers through tax breaks in a bid to become a manufacturing hub for the region.
Toyota Motor Corp., the world’s second-largest automaker, said in June it will build hybrid cars in Thailand from 2009. Toyota said it will spend about 90 billion baht ($2.7 million) in Thailand, it said in the statement.
Toyota also plans to invest 5.4 billion baht to build a new factory in Thailand for diesel engines used in pickup trucks.