General Motors pull out of SA
General Motors announced today that they are pulling out of South Africa. While painful, understanding the whole story is important to understanding its effects. General Motors in summary have said:
- The production of the Chevrolet brand will be ramped down with the view to stopping manufacture by end 2017.
- Isuzu will create its own brand and distribution network in South Africa.
- Opel has just been sold to the PSA group.
Impact on Chevrolet by General Motors move
The brand worst affected surely is Chevrolet, however, GM has given the commitment that the new Isuzu dealerships, under the banner of Isuzu Motors South Africa, will take on service and maintenance of Chev, Opel and Isuzu. Warranties and maintenance plans for Isuzu, Chevrolet and Opel will also not be affected as General Motors says they will honor them. The fact that General Motors is honoring the service and maintenance plans should mitigate prices of Chevrolets falling in 2017.
General Motors is currently evaluating “future opportunities for the Opel brand in South Africa”. This is made even brighter by the fact that Opel recently won the coveted Car Of The Year (COTY) award held at Kyalami race track in Johannesburg.
Isuzu has a bright future
South Africa is an important base and serves as access for many companies into the African continent. Isuzu’s has a new strategy to create a stand alone brand in South Africa. This will perform well as it is positioned to take advantage of future demand for infrastructure development increases on the African continent. Isuzu will distribute their brand out of 90 dealership nation wide.
In summary, change is always difficult, however, consumer demand remains. Where certain brands may suffer creates opportunities for others. I am hopeful that GM’s talks with PSA will be positive for South Africa.