By 2014, Isuzu Trucks South Africa (Itsa) will have made “significant changes” to the way it assembles trucks locally, says COO Craig Uren.
“We have done a lot of work on how to roll out a cost-effective solution to our manufacturing future in Port Elizabeth.”
General Motors South Africa (GMSA) is currently responsible for the contract assembly of Isuzu trucks in South Africa, at its Kempston road plant, in Port Elizabeth. However, GMSA is mulling the sale of this asset, as it consolidates all of its own manufacturing activities into its Struandale plant.
“We, as Itsa, must be responsible for our own assembly operations and we are looking at the best way to achieve this. In the end, we will make a decision that provides the most cost-effective solution to Itsa.”
Uren adds that Itsa hopes to bounce back this year after a tough 2011, when the aftermath of the earthquake and subsequent tsunami in Japan, in March, played havoc with sales and assembly forecasts.
“We ended the year at around 2 770 vehicles. We lost around 400 vehicles, but many of our customers allowed us to roll over their truck deliveries until a later date.
“We have to get back to free supply this year,” notes Uren. “We have to catch up and then get back to the normal course of business.”
Uren said it is proving quite a challenge to “reset” the business following the upheaval the natural disasters brought with them.
“It corrupts the base from which you work and then the dealers and the plant have to become used to a new volume level. You basically have to restart the whole network.”
Uren says the factory is now back up to 100% capacity and that Itsa will see an improvement in volumes in the second quarter of the year.
With this year assigned largely to catching up to a growing local truck market, next year will be dedicated to strong growth.
“We are looking at 20% growth this year over 2011 volumes,” says Uren. “This means catching up on volumes lost and growing a little bit.”
However, he adds that this target depends on the health of the global economy.
“We cannot be naive about the impact of global economics on our business.”