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Oct 15, 2010

GM to produce third vehicle model in PE from 2011

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General Motors South Africa (GMSA) will produce the new Spark entry-
level passenger car at its Port Elizabeth plant from the end of 2011.

General Motors (GM) Africa president and MD Edgar Lourencon says that initial production volumes will be 15 000 units a year, of which 50% will be exported to New Zealand, Australia and other right-hand-drive markets in the Asia-Pacific.

The additional production volume will add a second shift to the current one-shift operation at GMSA’s Struandale plant, creating an additional 500 jobs.

The additional production will also see 
investment by the US manufacturer in its local operation reach more than R1-billion, which will include preparations to assemble the new replacement models of the Isuzu KB pick-up and Chevrolet Utility, already manufactured at the GMSA plant.

The new Isuzu KB will be launched towards 
the end of 2012, and the new Chevrolet Utility in 2011.

Lourencon says that adding the Spark as the third production platform to GMSA’s line-up will see the company’s production capacity reach 60 000 units a year, up from the around 30 000 units to be achieved in 2010.

This will mean that GMSA will qualify for incentives under government’s Automotive Production and Development Programme (APDP), which kicks in at an annual production volume of 50 000 units. The APDP will be implemented in 2013.

Lourencon says that GMSA “is committed” to reaching the 50 000-unit threshold, and thanks the commitment from the Department of Trade and Industry to make it happen.

He adds that local content on GMSA’s 
vehicles will increase from the current around 25% to more than 40%, once all three new 
assembly programmes have been implemented.

Lourencon also emphasises that the recent labour action in the assembly, motor retail 
and component industry has “raised a high level of concern” about South Africa’s ability 
to be a competitive, reliable, global vehicle source, but adds that he is confident that the industry can still work together to increase its international competitiveness.

Trade and Industry Minister Rob Davies says that recent investments announced by South African vehicle manufacturers in preparation for the APDP amounted to R9-billion, support-
ing 4 000 jobs, with another R4-billion invest-
ment supporting 20 000 jobs, announced by the components sector.

Lourencon also notes that talks with the Japan-based Isuzu Corporation for South Africa to be the manufacturing base for most of the sub-Saharan African countries, and not only South Africa and its neighbours, will see overall exports from GMSA increase to around 15 000 units a year, up from the current 2 000 units.

“Our total export business would then be worth R1,5-billion.”

Edited by: Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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