BuzzSouthAfrica has confirmed reports about General Motors leaving South Africa. From our gathering, the intent of the move is to restructure international markets in order to strengthen the global business performance of the company.
South Africa isn’t the only country affected by the restructuring actions in General Motors’ GM international operations.
While Isuzu Motors is expected to purchase GM South Africa light commercial vehicle manufacturing operations, Chevrolet will be phased out of India and South African markets by the end of 2017. And, GM India will focus on export manufacturing.
General Motors informed BuzzSouthAfrica that the essence of the changes is to drive stronger financial performance and focus resources on business opportunities expected to deliver higher returns.
As informed, Isuzu will purchase GM’s Struandale plant and GM’s remaining 30 percent shareholding in the Isuzu Truck South Africa joint venture, with sales through a national dealer network.
Also, Isuzu will purchase GM’s Vehicle Conversion and Distribution Centre and assume control of the Parts Distribution Centre. Come the end of 2017, the company will phase out the Chevrolet brand in South Africa.
Nonetheless, GM will continue to work with PSA Group to evaluate the future opportunity for the Opel brand in South Africa. It was specified that existing Chevrolet and Opel customers will continue to be supported in the market.
Commenting, Stefan Jacoby GM Executive Vice President and President, GM International said:
“After a thorough assessment of our South African operations, we believe it is best for Isuzu to integrate our light commercial vehicle manufacturing operations into its African business.
We determined that continued or increased investment in manufacturing in South Africa would not provide GM the expected returns of other global investment opportunities.
In India, our exports have tripled over the past year, and this will remain our focus going forward…”
East Africa and Singapore were also affected by the restructuring actions. Isuzu has agreed to purchase GM’s 57.7 percent shareholding in GM East Africa. As such, it will assume management control as GM withdraw sales of the Chevrolet brand from the market.
However, GM International will streamline its regional headquarters office in Singapore. That, General Motors said, will retain responsibility for strategic oversight of the remaining regional business and markets, including Australia and New Zealand, India, Korea and Southeast Asia.
The Singapore action is expected to deliver greater organisational efficiencies while leveraging global resources and in-market expertise.
Following these actions, GM is expecting to realise annual savings of approximately $100 million. Also, the company plans to take a charge of approximately $500 million in the second quarter of 2017.
Already, GM has started working with employees, their union representatives and local authorities to provide transition support across affected markets.
Speaking about the changes, GM Chairman and CEO Mary Barra said: “We are committed to deploying capital to higher return initiatives that will enable us to lead in our core business and in the future of personal mobility.
“Globally, we are now in the right markets to drive profitability, strengthen our business performance and capitalise on growth opportunities for the long term.
“We will continue to optimise our operations market by market to further improve our competitiveness and cost base. As the industry continues to change, we are transforming our business, establishing GM as a more focused and disciplined company.”
Similarly, Dan Ammann, General Motors President affirmed that the actions will allow the company focus its resources on winning in markets with greater opportunity.
“We have compelling plans for growth in both the top line and the bottom line as we invest for the future,” Ammann added.