Johannesburg - General Motors (GM) reduced its planned production volumes at its manufacturing plant in Port Elizabeth because of a significant decline in new vehicle sales in key sub-Saharan African markets and was considering ways to reduce the size of its workforce.
But Denise van Huyssteen, GM’s communications general manager for Africa and the Middle East, stressed yesterday that GM’s presence in South Africa was not under threat. “As the largest market in Africa, South Africa remains a key market and we will continue to focus on providing a portfolio of products which meets our customers’ needs and is backed by outstanding levels of service,” she said.
Van Huyssteen confirmed the production schedule had been decreased based on the decline in the market and the outlook. “The economic weakness in key sub-Saharan African markets has led to a significant decline in new vehicle volumes in these markets, including South Africa,” she said.
Van Huyssteen declined to quantify the production volume reduction, but said it was being implemented.
Sales figures
An analysis by Business Report of the new vehicle sales figures released monthly by Lightstone Auto revealed that GM South Africa’s Chevrolet Spark sales declined by almost 9 percent in the first five months of this year compared with the corresponding period last year.
Chevrolet Utility sales were 28.5 percent lower and sales of Isuzu KB were down by about 24 percent in the same period.
Exports of Isuzu KB bakkies declined by 42 percent to 527 units in the first five months of this year compared with 900 units exported in the same period last year.
Van Huyssteen said the plant was operating on a single shift, but declined to quantify the number of employees who were surplus to the plant’s needs. “This is subject to the consultation process. We are working with key stakeholders to consider all alternatives, with voluntary separations and early retirement being preferred options, to minimise the impact of these changed circumstances on our business and on our employees.”
Life-cycle
GM South Africa started manufacturing the Chevrolet Spark in March 2012. The normal lifecycle for a car model is about seven years. Van Huyssteen declined to comment on the plans for the plant other than to confirm that they would continue to produce the Spark through its current lifecycle.
“Thereafter the focus will primarily be on light commercial vehicles,” she said.
GM and Isuzu Motors in July last year announced the signing of a framework agreement, which GM said further strengthened the relationship between the two vehicle manufacturers, secured GM’s presence in South Africa and would result in further capital investment and the creation of many new job opportunities.
Ian Nicholls, the president and managing director of GM sub-Saharan Africa, said at the time they expected the agreement to be a game changer in terms of the volume of vehicles it produced at its assembly plant in Port Elizabeth both in the short and longer term, “but the significant step-up will be in the longer term”.
Van Huyssteen said yesterday that GM and Isuzu continued to work together to finalise the optimal model for their manufacturing and distribution operations in the country.
“As can be expected, discussions of this nature normally take a significant amount of time to conclude. We continue to work on a solution… (but) are not yet in a position to announce the final details relating to this,” she said.
BUSINESS REPORT