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SA government tried to assist General Motors before its exit

South African Deputy President Cyril Ramaphosa has said the decision by General Motors to pull out of SA comes on the back of sustained efforts by government in recent years to assist the company.

Ramaphosa said General Motors had informed government that it had not performed well in the domestic market recently – both in terms of production and sales, but their decision he says was informed by the company’s global strategy, which includes exiting other markets such as Australia and India.

“The lesson that can be drawn from the experience is that the global automotive industry is a highly dynamic and competitive market in which companies make decisions based on their global strategies.

“In an increasingly competitive global market, countries compete for investment and production in the context of decisions made by global manufacturers,” he said.

Ramaphosa explained that the manner and timing of the General Motors decision to withdraw from South Africa did not allow for any meaningful intervention prior to the decision was taken. He said in a statement that the Department of Trade and Industry (dti) was in talks with General Motors South Africa with a view of finding a new investor for part of its SA operations.

General Motors announced in May of its intention to disinvest from South Africa by the end of 2017, and the company made a statement saying they had entered into talks with Japanese corporation Isuzu to take over part of its assets.

An urgent process has been put in place by the DTI to engage both General Motors and Isuzu with a view to ensure everything possible is done to support the production of Isuzu vehicles in South Africa.

“They will also explore the possibility that a new investor can take over the part of the General Motors facility not sold to Isuzu to produce other vehicles, possibly in another market segment or as a contract manager,” said Ramaphosa.

He said that against this background, government is engaged in an automotive policy review and strategy process, working closely with a wide range of companies and industry associations.

 

 

 

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