This past week, we are beginning to digest the news that we received last Friday. By the end of this year, we will see the departure of General Motors and Chevrolet from our shores, with plans in place for Isuzu Motors to purchase some of the American giant’s local manufacturing operations.
This has been a whirlwind couple of days as questions abound as to what this means for the South African consumer and the country at large. So let us attempt to answer these questions.
On Thursday morning 18 May, I received a press release from GM South Africa detailing their plans for the imminent future. The headline was that Isuzu Motors, quite soon after buying GMSA’s majority shareholding in the company’s operations in Kenya, would now also purchase the Struandale manufacturing plant in Port Elizabeth to continue the manufacturing of the Isuzu KB, as well as its medium- and heavy-duty commercial vehicles. Along with assuming control of GM’s parts distribution, and vehicle conversions and distribution centres, the Japanese automaker plans to establish its own dealer network in the country. The move is seen to form part of Isuzu’s strategy to expand into the continental market. “Isuzu is building a strong base to grow on the African continent in the long term”, said Haruyasu Tanishige, senior executive officer for the Sales Division of Isuzu Motors Ltd. “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.”
But what has spurred GM’s decision to leave South Africa (and also India, for that matter)? In the words of Executive vice President Stefan Jacoby, “We determined that continued or increased investment in manufacturing in South Africa would not provide GM the expected returns of other global investment opportunities.” Translation: South Africa isn’t making us enough profit to keep us here. Speculation was rife that the exit was due to the country’s current political and economic instability, but this was refuted by GM South Africa President, Ian Nicholls, in an interview with Cars.co.za. Despite this though, the fallout has began. Just days after the announcement, African News Agency reported that GMSA had filed a retrenchment notice with the CCMA, stating that roughly 600 workers were to lose their jobs by the end of July. There is no also no word yet on the future of employees at the dealership level, as while Isuzu has indicated it wants to establish 90 outlets across the country, that number can’t account for the 130 outlets that GMSA has. Following the retrenchment notice, the National Union of Metal Workers of South Africa (NUMSA) expressed concern for the job losses in the sector and the overall value chain, while Minister of Trade and Industry, Rob Davies added that GM’s decision to leave was not welcomed by government.
So, what does that mean for the drivers of the golden bowtie? According to Nicholls, all warranties, and service and maintenance plans would be honoured by GM outlets to the end of 2017, along with the new Isuzu network expected to be established, with the new outlets expected to continue even after GM has fully departure. Nicholls has also indicated that a parts supply agreement of at “at least 10 years” was on the cards.
In a statement sent to Grocott’s Mail, Dean Kent of Kenrich Motors Grahamstown assured clients and residents not panic over the news of the withdrawal, stating that all warranties and service plans for Chevrolet vehicles would be honoured by the local dealership. Kent added that any clients with queries should contact him or other dealership staff.
While answers have been given for Chevrolet drivers, the same cannot be said for Opel at the moment. The determination of the German automaker’s presence in South Africa will only be made once the sale of the brand to the Peugeot Citroen Group (PSA) has been finalised during the course of this year. Opel has scheduled a press conference in Sandton on 8 June to announce the way forward, while Isuzu will provide support for Opel vehicles until the sale is completed. Expect updates on this story at a later date.
For now though, we must tilt our hats and wave farewell to the American giant.
And any chance we had of getting the Camaro down here.
