General Motors Exits South Africa

South Africa DTI Minister Regrets General Motors South Africa Exit

Aerial View of Sea Point, Cape Town South Africa

Pretoria – Trade and Industry Minister Rob Davies has responded to General Motors South Africa’s (GMSA) decision to exit South Africa with regret and concern for the jobs and livelihoods that will be affected. “The Minister has learnt of the announcement by General Motors South Africa (Pty) Ltd to cease some of their operations in South Africa with regret and concern for the numerous employees whose jobs and livelihood will be directly and indirectly affected as a result,” said the Department of Trade and Industry.

In addition, the Minister noted that the decision by General Motors as 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.

Other activities include exiting Australia, in 2013, where there was a joint venture with Holden, the closure of a plant in Indonesia in 2015, as well as recent pronouncements by General Motors CEO Mary Barra that the focus of the organisation will in future be orientated towards the development and production of autonomous vehicles, electrification and connectivity.

“It should also be noted that the emerging global geo-political dynamics might have a bearing on some business decisions being made such as the recent confirmation of additional investment in the US coupled with further move of some parts production from Mexico.”

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 Program (APDP) since 2013;
  • Sales have been on a downward trend for the past 5 years; and
  • Exports remained low at about 2 000 vehicles per annum with a maximum of 3 500 units.

“Therefore whilst it is regrettable to see General Motors exit South Africa, market performance leading to cuts in profitability, coupled with recent global initiatives have created the conditions to make such a move likely.

“Although we do not welcome this decision, we believe that the future of the industry positive, as automotive industry stakeholders are finalizing a Master Plan for South Africa with a view to growing domestic vehicle production volume and local value addition and an announcement on the final program can be expected early 2018 latest and will cover the period post 2020,” said Minister Davies.

Measures to mitigate effects of exit

The Minister added that 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.

Last month, the National Energy Regulator (NERSA) announced that it has approved that Port Elizabeth Solar PV1 (Pty) Ltd be issued with a licence to operate a 5MW generation solar photovoltaic (PV) farm in the Coega Industrial Development Zone (IDZ).

[Source: South African Government News Agency ( SAnews.gov.za) -/- Media Relations]
[Photo Credits: inserted by openeyesopinion.com credits embedded]

###
 
 


 
Discover The Best Places To Retire, Do Business And Live Overseas

Visiting Las Vegas?… Check out this website first

Take a look at the Most Popular Trip Insurance plans Allianz has to offer
 
Compare Cheap Flights from the Departure City of your Choice with Airfarewatchdog!

Click here for reuse options!
Copyright 2017 openeyesopinion.com
Share This Post
Share on Facebook0Share on Google+0Tweet about this on TwitterShare on Reddit0Pin on Pinterest0Share on StumbleUpon0Share on LinkedIn0Digg thisShare on Yummly0Share on Tumblr0Buffer this pagePrint this pageEmail this to someone





Related News

  • The Brazilian Trade Balance Has An Accumulated Surplus Of Almost US$ 55.1 Billion In 2017
  • Apple Corporation To Build Giant Data Center In Ireland
  • Globalization Is Losing Momentum
  • Virgin Airlines Founder Richard Branson Will Invest In Saudi Arabian Red Sea Project
  • ‘Women In Business Program’ Launched In Tajikistan By EBRD
  • Micro Enterprise Trading Platform Launched By APEC
  • USDA Organizes Trade Mission To Brazil
  • EU Seeks Digital Tax Revenue From Big Online Companies, Such As Amazon And Facebook
  • European Union And Canada Trade Agreement (CETA) Goes Into Effect
  • American Companies Are Increasingly Regarding Hungary As A Site For Research & Development
  • Economic Relations Between UAE And Iraq Have Witnessed Unprecedented Growth
  • South Africa – African Union Ministers of Trade Meet In Ethiopia
  • A Chinese State-Owned Investment Firm Has Provided A $10 Billion Credit Line For Iranian banks
  • India investing $17 Billion On Japanese Bullet Trains
  • South Africa Strengthens Trade Relations With Russia
  • EU – International Trade Push Begins, EC Proposing To Open Trade Negotiations With Australia And New Zealand