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The department of trade and industry has described the news that General Motors is ceasing its South African operations as “regrettable”.
In a statement, Rob Davies, the minister of trade and industry, expressed “regret and concern” for the employees whose jobs and livelihood would be “directly and indirectly affected” by the decision.
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Minister Davies pointed out that the decision by General Motors was “part of a broader, international strategic position by the company to exit certain markets” and focus the organisation on target markets.
“It should also be noted that the emerging global geo-political dynamics might have a bearing on some business decisions being made such as the recent confirmation of additional investment in the US coupled with further move of some parts production from Mexico,” the statement added.
The statement also said that the GM SA plant in Port Elizabeth had not met its “initial annual minimum production volume of 50 000 units set under the APDP [Automotive Production and Development Programme] since 2013”, that sales had been “on a downward trend for the past five years” and that exports “remained low at about 2 000 vehicles per annum, with a maximum of 3 500 units”.
“Therefore, whilst it is regrettable to see General Motors exit South Africa, market performance leading to cuts in profitability, coupled with recent global initiatives, have created the conditions to make such a move likely,” the statement said.
“Although we do not welcome this decision, we believe that the future of the industry is positive as automotive industry stakeholders are finalising a ‘Master Plan for South Africa’ with a view to growing domestic vehicle production volume and local value addition, and an announcement on the final programme can be expected early 2018 latest and will cover the period post-2020,” Davies added.
Davies concluded by saying that his department would “continue to work with all stakeholders to mitigate the impact of this exit”.