General Motors pulls out of SA

General Motors and Isuzu Motors today announced their respective future plans for the Isuzu, Chevrolet and Opel brands in South Africa, subject to local regulatory requirements.

With this announcement, Isuzu Motors intends to purchase GM’s South African light commercial vehicle manufacturing operations and strengthen its presence in the market. GM intends to cease local manufacturing and selling Chevrolet vehicles in the domestic market by the end of 2017.

“After a thorough assessment of our South African operations, we believe it is best for Isuzu to integrate our light commercial vehicle manufacturing operations into its African business,” said Stefan Jacoby, GM executive vice president and president of GM International.

“We determined that continued or increased investment in manufacturing in South Africa would not provide GM the expected returns of other global investment opportunities.”

Isuzu announced it intends to:

• Purchase the Struandale manufacturing plant and GM’s minority shareholding in Isuzu Truck South Africa (Pty) Limited to continue manufacturing the Isuzu KB and medium- and heavy-duty commercial trucks in Port Elizabeth. This is subject to competition regulatory approval;
• Assume control of GM’s Parts Distribution Centre and Vehicle Conversion and Distribution Centre;
• Set up its own dedicated dealer network to market, distribute and service light commercial vehicles for existing and new Isuzu customers.

“We are committed to the South African market,” emphasised Haruyasu Tanishige, senior executive officer for the Sales Division of Isuzu Motors Ltd. “The integration of our light commercial and medium- and heavy-duty commercial business will strengthen our base to grow here. We will do this through our focus on providing outstanding aftersales and customer support, establishing close relationships with our local partners and expanding our business.

“Isuzu is building a strong base to grow on the African continent in the long term. Evidence of this is our recent purchase of GM’s 57.7 percentage shareholding in its East African operations, which has given us management control of the company. Integrating the South African light commercial vehicle operations into our business is the next step in laying the foundation for our growth plans in the future.”

Isuzu vehicles have had a presence in South Africa since assembly began over 44 years ago. For the past four years, Isuzu has occupied the number one position in the medium- and heavy-duty commercial truck segment of the South African market.

GM South Africa announced its plans to:

• Cease the manufacture and supply of Chevrolet vehicles to the domestic market by the end of 2017, subject to consultation with employees and unions;
• Continue to provide service and parts support for Chevrolet customers.

Following the recent announcement of the sale of Opel/Vauxhall to the PSA Group, GM continues to work with PSA to evaluate future opportunity for the Opel brand in South Africa. Importantly, existing Chevrolet and Opel customers will continue to be supported in the market.

GM South Africa president and managing director Ian Nicholls said: “These decisions were not made lightly. We appreciate the support that our employees, customers, dealers, suppliers, the government and other key stakeholders have given us over the many years that we have operated in this country. We will manage the transition as smoothly as possible.”

The car maker informed employees and unions of the announcements this morning and will begin the formal consultation process with them immediately. GM South Africa has established support centres for employees.

GM South Africa will also work closely with affected dealers on a robust transition plan. Customer support centre resources will be expanded, and all warranties and service agreements as well as ongoing service and parts requirements for all vehicles will continue to be honoured.