Following General Motors’ announcement last Thursday that it intended to exit the South African market by the end of 2017, more details have emerged about the number of jobs and dealers that will be affected by the move.
In a statement released on Sunday, General Motors said that its departure would affect around 589 of the company’s (approximately) 1500 employees, subject to the consultation process, and that the carmaker has commenced the legally required Section 189 process.
“While not all members of staff have received their letters, we have decided to release these figures in response to inaccurate reporting of figures in the public domain,” the statement pointed out.
The remaining employees, it is presumed, would be transferred to Isuzu Motors, which has agreed to purchase GM’s Struandale-based manufacturing facility and its distribution centre. This will see Isuzu continuing continuing production of the KB bakkie as well as the brand’s medium and heavy commercial vehicles with a view to expanding its African footprint.
However, further jobs are expected to be shed within GM’s dealer network. There are currently 132 GM dealerships in South Africa, but Isuzu plans to keep just 90 of them.
At this stage it is not known whether any of these would become Opel dealers. GM is currently in talks with the Opel brand’s new owner PSA (Peugeot-Citroen) about possible opportunities to keep the Opel flag flying in South Africa. An announcement is expected to be made on June 8.
"Customers won't be left in the lurch"
As stated last week, the Chevrolet brand is set to disappear from the local market altogether.
However GM has assured owners of Chevrolet and Opel vehicles that they won't be left high and dry following the company's shock decision.
The changeover plan for GM and Isuzu is expected to be finalised towards the end of 2017 and GM has stated that it would honour all warranties and service plans and that it would award the responsibility for Chevrolet and Opel after sales support to the new Isuzu dealer network until discussions with PSA have been finalised.
Furthermore, GM has promised to provide parts to Chevrolet customers for up to 10 years after production of the model in question has ended.
But weren't they selling quite well?
GM said the disinvestment in SA was based on a global decision on where the company believed it could get the best return on investment, but the move came as a surprise given the relative popularity of the brand in South Africa, particularly the locally-built Chevrolet Spark and Utility.
The Utility half-tonner is one of SA's best-selling vehicles and averages over 1000 units per month, while the Spark is a relatively popular entry-level hatch that averaged 365 monthly sales last year.
Chevrolet's exit will also see the local demise of the Cruze sedan, and the Captiva and Trailblazer SUVs.
Chevrolet sold 7847 vehicles in SA last year, far fewer than big players like Toyota, Ford, and Volkswagen, but ahead of brands like Suzuki, Land Rover and Volvo.
Opel sold 4098 cars in SA in 2016, which might imply a bad omen for the brand given that Chevrolet sold nearly double that and still decided to pack up and leave.
However, Opel's volumes could be a boon for PSA which sold only 982 Peugeots and 437 Citroëns here last year and subsequently discontinued the Citroën brand.