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Rest of Africa increasing its competitiveness, warns GM Africa boss

Isuzu Midnite

Opel Mokka

Photo by Duane Daws

Opel Adam

Photo by Duane Daws

20th August 2014

By: Irma Venter

Creamer Media Senior Deputy Editor

  

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Many African countries were opening their doors to business, increasingly welcoming investors, said General Motors (GM) Africa president Mario Spangenberg on Wednesday. These countries were working hard to become more investor friendly, and South Africa had to take notice and improve the competitive edge that it currently had, he emphasised.

Speaking in Johannesburg, Spangenberg warned that South Africa could not expect multinational companies to invest in the country as part of their social responsibility demands. Multinationals such as GM, one of the world’s biggest car makers, had a list of requirements in order to operate successfully in any country, including stable electricity supply and a well-educated work force.

“We need predictability and stability.”

Spangenberg said labour instability in South Africa had been increasing over the past two years, and “it was not positive”.

He added that it was of “critical importance” to all South African stakeholders to work together and realise that gains in the labour force required improved productivity to offset costs.

Spangenberg emphasised that GM remained committed to its business in South Africa and Africa, but questioned whether South Africa was not to some degree hindering itself in achieving greater success.

GM had 300 dealerships across Africa.

General Motors South Africa (GMSA) had just completed the launch of the left-hand-drive version of the Isuzu KB pickup to all its export markets in Africa, adding to the right-hand-drive version already available.

“We now serve some 34 markets in Africa,” said Spangenberg.

GM Africa was headquartered in South Africa, at GMSA’s plant in Port Elizabeth, and served Africa, as well as Iraq and Israel.

The business unit sold 107 000 new vehicles in Africa in the first seven months of the year, up 7% on the same period last year.

GM Africa would launch ten new vehicles in Africa over the next 12 months, with seven of these to be introduced in South Africa.

Spangenberg said GM Africa saw a “lot of potential” in continuing to build up export volumes from its South African plant.

GMSA exported the Isuzu KB into Africa. The company also produced the Spark entry-level car, the Chevrolet Utility and the Isuzu KB at its Port Elizabeth plant.

Production volumes at Port Elizabeth would not reach 50 000 units this year, as demanded by the Automotive Production and Development Programme’s (APDP’s) volume incentive scheme, confirmed GMSA operations VP Ian Nicholls on Wednesday.

However, the South African government’s APDP programme provided some leniency owing to the labour action which had affected the automotive industry over the last 12 months. This would see GMSA remain fully compliant with the programme, he noted.

Nicholls said GMSA had to push its exports into Africa in order to improve production numbers.

The Isuzu KB was performing well in Ghana, Angola, Zimbabwe and Zambia, while Nigeria’s sudden increase in import duties on new vehicles was “some cause for concern”.

Spangenberg said GM Africa had no current plans to expand production in Africa beyond its existing three plants in Egypt, Kenya and South Africa.

MOKKA, ADAM COMING IN 2015
GMSA sales, service and marketing VP Brian Olson announced on Wednesday that the local Opel stable would be expanded in 2015, through the introduction of the German brand’s Adam and Mokka models.

The Adam was a small city car set to compete in the fashion mini segment, and would arrive in South Africa in early 2015.

The Adam would be followed by the Mokka premium compact sports-utility vehicle, set to launch in the second quarter of 2015.

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Edited by Creamer Media Reporter

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