Exporting Chev Spark to UK, Australia too expensiveComment on this story
A PLANNED vehicle export programme to the UK and Australia of the locally produced Chevrolet Spark by General Motors South Africa (GMSA) has failed because of competitiveness issues.
Mario Spangenberg, the newly appointed president of GM Africa, said yesterday that the Spark was not price competitive when logistics and port costs to these export markets were included.
This meant GMSA was unable to bring it to market in these countries at a competitive price compared with other source plants, resulting in the Spark being exported out of South Korea to these markets.
“If you are geographically hampered at the bottom of the world, you have to do certain things better to compensate for these costs,” he said.
Spangenberg added that GM was excited by the export opportunities available from South Africa but admitted its export history from South Africa “has been miserable”.
He highlighted a number of red flags that needed to be addressed to permit South Africa to compete globally as an automotive hub.
They were the need for a stable and cost competitive labour environment; more competitive ports and logistics parks to offset the negative impact of South Africa’s geographic location; the provision of infrastructure, including electricity, at a cost that allowed the automotive industry to grow and export; and an increased focus on education.
GMSA vice-president of planning Ian Nichols said the original plan was to produce more than 10 000 Spark units a year, but only about 7 000 units were produced last year.
However, Spangenberg was optimistic about finding new opportunities for the Spark and the export prospects for GMSA, particularly in Africa with the next generation Isuzu KB bakkie to be launched next week.
Spangenberg was also adamant GMSA would comply with the rules of the new Automotive Production and Development Programme (APDP).
Local vehicle manufacturers must exceed a minimum annual production threshold of 50 000 units to qualify for APDP incentives and benefits.
Spangenberg said GMSA produced about 45 000 units last year but this included only about 1 000 export units into sub-Saharan Africa.
It would be exporting “significantly more” vehicles into Africa in future.
GMSA previously only produced right-hand drive Isuzu models and had an agreement to sell them into Zambia, Zimbabwe, Malawi, Mozambique and Mauritius.
It will produce both left- and right-hand drive models of the next generation Isuzu KB and has an agreement with Isuzu to export these into all 46 countries in sub-Saharan Africa. – Roy Cokayne