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Shift in product focus will not threaten jobs, says GMSA

Potential product plans at General Motors SA (GMSA) pose no threat to jobs, suppliers or investment at its Struandale assembly plant in Port Elizabeth, operations vice-president Ian Nicholls said on Tuesday, 31 March.
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He was reacting to a Business Day report that GMSA planned to halt assembly of the Chevrolet Utility bakkie and Spark car after the existing models reach the end of their lifecycles, and concentrate on high-volume manufacture of the Isuzu KB one-ton bakkie.

The latest Utility is due to end in 2018 and the Spark in 2019. The current Isuzu KB was launched in 2013 as the final step in a R1bn investment in the three vehicles.

The company also builds Isuzu heavy trucks at its original Kempston Road premises.

While confirming that "a longer-term manufacturing footprint is under development for GMSA", Nicholls added that it is "premature at this stage to speculate about which products would form part of our future manufacturing portfolio".

The Business Day report observed that an Isuzu-only plant would allow GMSA to enjoy the full benefits of the incentive-driven Automotive Production and Development Programme (APDP), which discourages multi-product assembly. It would offer more security to South African suppliers as higher volumes of vehicle-specific components would lower unit costs and encourage local content.

By the same token, more efficient manufacture and higher volumes would enhance job security at the Struandale plant.

The APDP is due to run until 2020 but some incentives - which include investment rebates of up to 30% - are expected to extend beyond then.

"Our objective remains to grow our locally assembled vehicle production for both the domestic and export markets. This will allow us to continue to contribute towards the local economy, as we have done since 1926," Nicholls said.

He said Isuzu KB volumes grew 8% last year and that, together with the Utility, GMSA accounted for 19% of SA's light commercial vehicle market.

Besides local sales, GMSA hopes to turn Isuzu into a major export product.

GMSA also boasted a 36% rise in Opel sales last year after refreshing the imported brand locally.

"As we enter the next phase of capital investment, we will be looking to undertake further upgrades to our manufacturing operations and investment in next-generation programmes," Nicholls said.

Source: Business Day


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