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General Motors is leaving South Africa

18 May, 2017, 21:30 | Author: Nadine Todd
  • General Motors says the move is aimed at driving stronger financial performance and focus its capital and resources on business opportunities expected to deliver higher returns

The negotiations to settle the asset sale at Halol continues.

In South Africa, Isuzu will acquire GM's light commercial vehicle manufacturing and GM will cease manufacturing and sales of Chevrolet in the domestic market, subject to local regulatory requirements.

He added that Isuzu Motors would, once fully entrenched in South Africa, explore the introduction of new products to the country, while also investigating further export opportunities for the plant.

Besides its light commercial vehicle manufacturing operations in Struandale, Port Elizabeth, which it was selling to Isuzu, the United States auto maker meant to cease its South African operations by the end of 2017, GM said on its website. Rumours suggest that Chevrolet might continue to employ the service staff for the next 2 years in order to cater to all after sales needs of its existing customers.

The decision, which follows a comprehensive review of future product plans for GM India, is part of a series of actions taken by General Motors to address the performance of its operations worldwide.

According to Dan Ammann, the Global President of GM, the decision on Thursday will cancel all the plans that the company revealed in 2015 including investing $1 billion to roll out new design architecture and build new vehicles especially for the Indian market.

The company is also pulling out of South Africa. The country has a population of 1.3 billion and is set to overtake Japan as the third-largest market in the world within the next ten years. The decision comes after unsuccessful attempts to enter into the competitive passenger vehicle market despite having its presence in India from the last two decades. GM India's press note says that General Motors International had reviewed the performance of its Indian arm throughout 2016 and deemed it profitable to carry on exclusively with its exports rather than concentrate on selling its products here. The American automaker is keeping its Bangalore tech center open and turning its Talegaon assembly plant into an export-only affair.

GM, which offers only its Chevrolet brand in the Indian market, has manufacturing bases in Maharashtra's Talegaon and Gujarat's Halol.

GM unveiled in 2015 to invest $1 billion in India to deploy newly-designed vehicle architecture as part of a Global Emerging Market vehicle programme or GEM for short, and build a new line of low-priced vehicles in India and while that brought in a breath of relief for Chevrolet India, clearly no one could have foretold that operations will be shut.

The answer to the question‚ "What does this mean for me?" is: "If you are an Isuzu‚ Chevrolet or Opel owner ongoing aftersales and parts support will continue through the existing GM dealer network to the end of 2017". GM South Africa has established support centres for employees. Its flagship brand, Chevrolet, was introduced in India in 2003.

The automaker blamed the pullout on its failure to bring successful products to the Indian market as most of its new launches failed to turn around its operations.

GM said the actions will save it $100 million annually.

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