IF there’s a silver lining to the dark cloud cast over the local automotive industry by General Motors’ recently announced decision to pull out of South Africa, it’s Isuzu Motors’ commitment to strengthen its presence in the market.
GM dropped the bombshell last month, announcing it would cease local manufacturing and selling Chevrolet vehicles in the domestic market by the end of 2017. This will include the locally manufactured Chevrolet Utility bakkie.
While it remained unclear at the time of going to press how many jobs would be lost in the US-based automaker’s exit from South Africa, the impact could have been a lot worse had Isuzu not come to the party.
It plans 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;
It will also assume control of GM’s Parts Distribution Centre and Vehicle Conversion and Distribution Centre and 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,” said 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,” Tanishige said.
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.
Commenting on the shock decision, GM executive vice president and president of GM International, said: “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”.
“We determined that continued or increased investment in manufacturing in South Africa would not provide GM the expected returns of other global investment opportunities.”
GM South Africa said it would 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 said it would continue 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 said.
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 company has established support centres for employees and said it would 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 honored.”