Cabinet regrets GMSA exit

Thursday, May 25, 2017

Pretoria - Cabinet has noted with regret the decision by General Motors South Africa (GMSA) (Pty) Ltd to phase out the manufacturing and sale of Chevrolet vehicles in the country.

“This holds dire consequences for those who will lose their job and for our economy,” Cabinet said in a statement on Thursday following its fortnightly meeting.  

Government remains committed to support the country’s automotive sector, which is critical for the economy and job creation. The Department of Trade and Industry (dti) continues to work with all stakeholders to mitigate the impact.

“To increase manufacturing, employment creation and export intensity, we recently launched the ninth phase of the Industrial Policy Action Plan (IPAP) to guide our actions,” Cabinet said.

Cabinet noted that Isuzu, which has been partnering with GMSA over the years in South Africa, will take over the operations from GMSA.

Last week, Trade and Industry Minister Rob Davies said the decision by General Motors was part of a broader, international strategic position by the company to exit certain markets and focus the organisation on target markets and products.

This, said the Minister, is evidence through recent activities like pulling out of Europe in 2017 (Opel, Vauxhall brand sold to Peugeot SA) and the closure of a plant in Halol, India, in April 2017.

General Motors has had a presence in South Africa since 1926, under various brands such as Buick, Chevrolet, GMC, ISUZU, Oakland, Oldsmobile and Vauxhall. 

Given the intense competition in the South African market, especially after 1994, GM has had some difficulties including:

  • The GMSA plant not meeting the initial annual minimum production volume of 50 000 units set under the Automotive Production and Development Programme (APDP) since 2013;
  • Sales have been on a downward trend for the past five years; and
  • Exports remained low at about 2 000 vehicles per annum, with a maximum of 3 500 units. 

Measures to mitigate effects of exit

Minister Davies said the dti will continue to work with all stakeholders to mitigate the impact of this exit.

“These initiatives include encouraging the strengthening of the presence, including vehicle assembly, of ISUZU, who has been partnering GMSA in South Africa.”

Minister Davies also expressed confidence that recent announced investments in Coega should save jobs in automotive production in the Nelson Mandela Bay Metropolitan area, and that anticipated investments and localisation by the remaining vehicle producers will have a positive effect going forward. – SAnews.gov.za

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