Chev production set to end as Isuzu prepares to take over GM operations in SA
General Motors is withdrawing from SA, and is selling the General Motors South Africa manufacturing facility in Struandale to Isuzu Motors. Production of Chevrolet models in the plant will be phased out before the end of 2017, while sales of Chevrolet products will also cease by the end of the year.
General Motors commented it did not believe that continued and further investment in vehicle manufacturing in SA would yield the expected returns of other global investment opportunities.
At the same time, discussions with the PSA Group are underway to determine future opportunities for the Opel brand in South Africa. This follows the sale of Opel by GM to Peugeot earlier this year.
Isuzu will take over the GMSA Struandale plant, as well as the parts distribution and vehicle conversion and distribution centres, and will set up an independent, dedicated Isuzu dealer network to market, distribute and service Isuzu light commercial vehicles.
The good news is that Isuzu is expected to invest significantly in the local plant, which is likely to include tooling for the next-generation Isuzu KB one-ton pick-up range. It also plans to integrate the newly acquired LCV operation with its medium and heavy commercial business.
It’s not clear whether the recent downgrade in SA’s credit rating, nor the uncertain political and economic climate, contributed to GM’s decision to divest from the country. Earlier this year, GM stated that the sale of Opel was part of a strategy to focus more specifically on the GM core business in the US.
Regardless of motive, the move is certain to have a knock-on effect among local suppliers, while it may lead to other automotive businesses reconsidering their SA presence and involvement.
GMSA has assured all existing Isuzu, Chevrolet and Opel customers that their vehicles will continue to be supported, and that all warranties and service plans will be honoured. After-sales service will be offered through Isuzu’s dealer network, once this has been established.
According to GMSA president and managing director, Ian Nicholls, the 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,” he said.