‘General Motors SA here to stay’

Despite the negativity surrounding the financial health of General Motors’ North American headquarters, the company’s South African arm remains confident of its future and has implemented new customer support structures and a streamlined model line-up.

By Gareth Dean

During a recent press conference held at GMSA’s Woodmead Gauteng headquarters, GMSA managing director Steve Koch stated that General Motors’ financial predicament in the ‘States was not necessarily a reflection of the local company’s fortunes.

He pointed out that GMSA’s outlook remained positive thanks to such factors as the company being debt-free, in possession of a strong product portfolio, in a market with low labour costs, and with access to finances which can be channelled towards important investments in after-sales service and new product development.

In a bid to show its support and commitment to the South African market, GMSA has launched its GM Total Confidence program. This three-pronged initiative was introduced by GMSA Vice-President of Vehicle Sales and Marketing Malcolm Gauld as “support for customers of GMSA in uncertain times.”

The first part of the programme comprises a warranty extended to 5 years/120 000 km for all GMSA products bough since March 23 this year. Second is a payment protection scheme for vehicles purchased between May 4 and July 31 of this year. Under this programme, if the vehicle owner is retrenched within 2 years of purchasing his or her vehicle, GMSA will pay the vehicle’s finance instalments for up to nine months (six months in the case of the first retrenchment). The plan is administered by the International Underwriters and Administrators (IU&A). Lastly, the company’s Roadside Assistance program has been extended to 5 years/120 000 km and covers such extras as accommodation, up to 2 days’ storage of the vehicle, and up to 4 days of alternative transport – as well as aid for those who’ve run out of petrol or locked keys in their car.

With regards to strengthening its product portfolio, GMSA’s Marketing General Manager Brian Olsen outlined the discontinuation of 9 products (including such niche models as the Meriva, Tigra, Zafira, and 3 Astra models) that constitute less than 3 per cent of the company’s sales.

He went on to show that practical, high-volume models such as the upcoming new Chevrolet Spark and the Orlando MPV, both due in 2011, as well as the company’s Corolla-rivalling Cruze compact saloon which is due here by the end of the year, will be the focus of GMSA’s future product strategy. That’s not to say that the company’s larger offerings will fall away – both the Lumina and Cadillac ranges will continue to be represented in our marketplace – but exotics such as the Camaro, a model in need of extensive re-engineering for RHD markets, will no longer emerge by 2011.

The marque upon whose future the most questions were directed was Hummer, in particular the locally-manufactured H3 model. Koch mentioned that the Struandale plant in Port Elizabeth, where the H3 is produced, would encounter a 4 to 5 month hiatus in production due to decreasing global demand. That, in turn led to a number of recent retrenchments at the facility.

Koch went on to explain that General Motors was still in the process of offering the Hummer brand to another investor, and that there was strong interest in the marque. Although a final bidder had not been named, there is a strong chance that H3 production could move in future. With regards to what is set to replace the Hummer at Struandale, Koch explained that H3 production would remain in place as long as the brand was viable. He added that “no one should worry about Hummer’s future in South Africa regarding parts and warranties”, referring to GMSA’s R220 million investment in a state-of-the-art parts distribution plant in Coega, Port Elizabeth. He also pointed out that the brand was far from static, given the recent launch of a V8-engined H3 and the recent departure of two H3 diesel prototypes from our shores for emissions testing in Europe.

GMSA has also embarked on a vibrant new advertising initiative that puts a modern twist on the catchy “Blue skies, braaivleis, sport, and Chevrolet” advert of the late 1970s. In addition to launching a competition to win “a trunk full of cash”, the musically-driven new advertising campaign aims to make South Africans “fall in love with Chevrolet again”, according to Olsen.

Koch concluded by saying that he would like to see the aforementioned investments steer both General Motors and its GMSA arm through the current economic downturn without resorting to Chapter 11 Bankruptcy filing, but added that such a move remained an option for the U.S arm of the company.

He also assured that General Motors would remain in South Africa as long as companies are building cars here, and that the new incentives were driven by the challenges facing the economy as a whole, and not what was happening in the United States…