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GMSA's R1bn manufacturing investment

1 October 2010

General Motors South Africa has announced an investment of over R1-billion in its Struandale, Port Elizabeth plant to enable the company to build the new generation Chevrolet Spark, Chevrolet Corsa Utility and Isuzu KB vehicles for local and international markets.

The Spark will initially be produced for the local market as well for Australia, New Zealand and other Asia Pacific right-hand drive markets. Launched in South Africa in August this year, the Spark is currently imported from South Korea.

"This investment reinforces our commitment to doing business in South Africa and continues a key player in motor industry," General Motors Africa MD Edgar Lourencon said in a statement this week.

"This decision was based on the Spark success in the global market and to support GM South Africa's objective to assemble over 50 000 vehicles per annum, in line with the government's Automotive Production Development Plan, which replaces the Motor Industry Development Plan in 2013."

Lourencon said the Spark was well suited to the South African market, with customers having placed over 1 800 orders for this product during the first month of sales: "We therefore have no doubt that the new Spark is going to be a volume player here," he said.

Expanding export markets

Local production is set to commence during the first quarter of 2012, creating about 500 direct new jobs in GMSA. The plant will assemble around 15 000 Sparks per annum, with half of this destined for export markets.

GM South Africa also announced that it had reached an agreement with Isuzu Motors Limited of Japan to expand exports of its Isuzu light commercial vehicles in sub-Saharan Africa. This agreement will provide export opportunities beyond the current export markets of Mozambique, Zimbabwe, Zambia, Malawi and Mauritius.

The Isuzu export contract, together with the new Spark export contract, is valued at over R1.5-billion per annum.

Lourencon said there were opportunities in the short to medium term to expand export markets for the new Spark and Isuzu KB, but that it was "dependent upon the ability of the South African motor industry to improve its overall competitiveness".

State involvement, challenges

"We want to thank [the] government for the support the industry receives via the Automotive Production Development Plan," Lourencon said. "Without these levels of support, we would not be able to make these investments in the South African automotive industry."

He added that the recent labour disruptions in the automotive and components industry, and associated above-inflation wage increases, meant that a concerted effort was called for from the industry, the unions and the government to improve productivity levels in order to reverse the current negative trend.

"We are confident the necessary work will be done, and we are committed to do the best we can to help grow the automotive industry in SA."

SAinfo reporter