Many African countries are increasingly welcoming investors, says General Motors (GM) Africa president Mario Spangenberg.
These countries are working hard to become more investor friendly, and South Africa has to take note and improve the competitive edge that it currently has.
Spangenberg warns that South Africa cannot 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 carmakers, have a list of requirements in order to operate successfully in any country, including stable electricity supply and a well-educated work force.
Spangenberg says labour instability in South Africa has been increasing over the past two years, and “it is not positive”.
He adds that it is of “critical importance” to all South African stakeholders to work together and realise that gains in the work force require improved productivity to offset costs.
Spangenberg says GM remains committed to its business in South Africa and Africa, but questions whether South Africa is not to some degree preventing itself from achieving greater success.
GM has 300 dealerships across Africa.
General Motors South Africa (GMSA) has just completed the launch of the left-hand drive version of the Isuzu KB pick-up in all its export markets in Africa, adding to the right-hand-drive version already available.
“We now serve some 34 markets in Africa,” says Spangenberg.
GM Africa is headquartered in South Africa, at GMSA’s plant in Port Elizabeth, and serves Africa, as well as Iraq and Israel.
The business unit sold 107 000 new vehicles in Africa for the first seven months of the year, up 7% on the same period last year.
GM Africa will launch ten new vehicles in Africa over the next 12 months, with seven of these to be introduced in South Africa.
GMSA exports the Isuzu KB into Africa. The company also produces the Spark entry-level car, the Chevrolet Utility and the Isuzu KB at its Port Elizabeth plant.
Production volumes at Port Elizabeth will not reach 50 000 units this year, as prescribed by the Automotive Production and Development Programme’s (APDP’s) volume incentive scheme, confirms GMSA operations VP Ian Nicholls.
However, the APDP provides some leniency owing to the labour action which affected the automotive industry over the last 12 months. This will see GMSA remain fully compliant with the programme, he notes.
Nicholls says GMSA has to push its exports into Africa in order to improve production numbers.
The Isuzu KB is performing well in Ghana, Angola, Zimbabwe and Zambia, while Nigeria’s sudden increase in import duties on new vehicles is “some cause for concern”.
GM Africa has no current plans to expand production in Africa beyond its existing three plants in Egypt, Kenya and South Africa.
GMSA says the local Opel stable will be expanded in 2015 through the introduction of the Adam, a small city car set to compete in the fashion mini segment, to be followed by
the Mokka premium compact sports utility vehicle.