The Economic Freedom Fighters (EFF) said on Friday that General Motors’ (GM) decision to exit South African market called for a permanent solution to build a domestic automotive industry as it would lead to loss of thousands of jobs.
“The EFF is in no shock to learn of General Motors’ decision to disinvest from South Africa. The EFF has long called on South Africa to build internal industrial capacity and not rely on foreign investments who just leave us when they deem fit,” the party said in a statement.
“A permanent solution is to build our own automotive industry, subsidise it, and provide it with a solid market through government budget and offtake.
“Not only will this be a permanent solution for broadening our own mass based production and creating a solid market, but it will be a permanent solution in creating sustainable jobs and the overall development of our country.”
General Motors South Africa (Pty) announced on Thursday that it was withdrawing from South Africa because the market could no longer provide it with the expected returns.
As a result, production and sales of all Chevrolet models will be phased out, and Isuzu will take over the firm’s operations in Port Elizabeth. Isuzu will also be taking over the parts centre because it will be manufacturing trucks and commercial vehicles.
GM currently employs 2 000 South Africans at its plant in Port Elizabeth and its withdrawal is likely to threaten the livelihoods of these workers and their families.
In pursuit of better global opportunities, GM this year pulled out of Europe (Opel/Vauxhall brand sold to Peugeot SA). Before that it closed plants in Indonesia in 2015 and Halol, India in April 2017.
The EFF said South Africa’s failure to build a domestic automotive industry would result in even more job losses and the destabilising of the local automotive industry.
“This will soon have a ripple effect on other industries in which the government of the ANC has failed to develop and prioritise internal capacity,” the EFF said.
“It must worry us, as a country, living in a high-tech industrial age that we do not produce our own automobiles. So much of our economy depends on automobiles, yet our state has not invested in the materialisation of sovereignty in the automobile industry.
“The sooner we locally produce the majority of the good we consume, the faster we get to sustainable solution to high unemployment, poverty and inequality.”
Minister of Trade and Industry Rob Davies said emerging global geopolitical dynamics might have a bearing on some business decisions being made such as General Motors leaving South Africa.