United States auto giant GM to pull out of South Africa


It was reported earlier that the American carmaker has shut down their Halol facility and shifted production to the Talegaon assembly plant.

General Motors and Isuzu Motors today announced their respective future plans for the Isuzu, Chevrolet and Opel brands in South Africa, subject to local regulatory requirements. The carmaker had a year ago put on hold its planned investments on new models for India as the company wanted to undertake a full review of its future product portfolio for the country. GM acquired the company for $ 1.2 billion in April 2002.

Despite being an early entrant, GM has struggled to boost its sales and market share in India in part because it has failed to launch low-priced yet feature-rich vehicles that Indian buyers prefer, according to analysts. Its production, however, grew about 16 per cent to 83,368 units most of which were exported. The exports are centred around its small auto "Beat".

"We explored many options, but determined the increased investment originally planned for India would not deliver the returns of other significant global opportunities".

"Globally, GM firmly believes there are opportunities where it can achieve greater return on investment - in specific vehicle segments and markets where the outlook for growth is very strong", GM said in a statement issued by its operations in South Africa. "At one end, we are eyeing sales of 10 million cars by 2030, and on the other, we are seeing global brands losing faith in our market", said Puneet Gupta at market researcher IHS Markit.

GM plans to continue to work on the $5 billion GEM programme, which GM is developing with SAIC Motor.

"We will honor all our commitments to customers, this includes our after sales service agreements to them. We will continue to honour all warranties and provide comprehensive after-sales support", Kaher Kazem, President and Managing Director, GM India, said.

Despite the axing of the Indian venture, GM's Technical Centre-India (GMTC-I) in Bengaluru will remain operational.

The National Union of Metalworkers of South Africa has announced it will consult its lawyers based on suspicions that "shareholders got a very good deal at the expense of workers" following General Motors' announcement it would pull its operations out of South Africa. Negotiations continue on the asset sale at Halol.

GM's operations in South Africa, meanwhile, will be sold to Japan's Isuzu Motors, which also bought a controlling interest in GM East Africa in February. It, however, did not disclose how numerous would be affected by the development. The models that are likely to available at Chevrolet dealerships include - the Beat hatchback, Sail compact sedan and the Cruze mid-size sedan.