Business, South Africa

Why General Motors quit operations South Africa?

About a week ago General Motors South Africa (GMSA) (Pty) Ltd announced its decision to exit South Africa to focus on more profitable markets.

Today we look at three major reasons which propelled the company to quit operations in South Africa .

General Motors has had a presence in South Africa since 1926, under various brands such as Buick, Chevrolet, GMC, ISUZU, Oakland, Oldsmobile and Vauxhall.

Given the intense competition in the South African market, especially after 1994, GM has had some difficulties including:

Tough Regulations

    The GMSA plant not meeting the initial annual minimum production volume of 50 000 units set under the Automotive Production and Development Programme (APDP) since 2013;

Low sales

    Sales have been on a downward trend for the past five years;

Low exports

    Exports remained low at about 2 000 vehicles per annum, with a maximum of 3 500 units;

According to the Trade Union Federation Cosatu – One of the “unmentioned reasons” for GMSA to disinvesting from South Africa is a result of “lack of leadership”.

The company is of the view that the foreign investors will not invest in the country until there is new leader they can trust.

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