Junk Status Disaster: General Motors will ‘cease South African operation’
Is the first of many to go?
Well, we all knew the result of Junk Status was going to rear its ugly head soon enough. Thursday morning saw General Motors (GM) inform employees and unions that it is quitting South Africa. The US car maker has announced its intention to cease its South African operations by the end of 2017.
The only exception is its manufacturing operations centre in Port Elizabeth, the company is selling that centre to Isuzu. The company’s decision may actually not be that strongly influenced by our new junk status, especially if you look at their other announcements over the last few months.
In March, GM announced that they were leaving Europe by selling the Opel brand to the makers of Peugeot and Citroen. The group has also announced that they will be leaving India.
“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‚” GM’s vice-president of international operations‚ Stefan Jacoby.
“We determined that continued or increased investment in manufacturing in SA would not provide GM the expected returns of other global investment opportunities.”
“Globally, GM firmly believes there are opportunities where it can achieve greater return on investment – in specific vehicle segments and markets where the outlook for growth is very strong (business adjacencies, SUVs and crossovers, U.S. and China).”
South Africans who own Chevrolet vehicles can rest at ease, the company say they are committed to continuing to provide service and parts support for their customers.
“If you are an Isuzu‚ Chevrolet or Opel owner ongoing aftersales and parts support will continue through the existing GM dealer network to the end of 2017. All existing warranties and service plans remain in place and will be honoured beyond 2017.”
“From 2018‚ Isuzu dealers will provide aftersales and service support to Chevrolet and Opel customers until the details of our discussions with PSA have been finalised.”
Whichever way you look at it, the big international companies don’t seem to be finding South Africa anywhere near as desirable as it was a few years ago.