CAPE TOWN– The Department of Trade and Industry (dti) is engaging General Motors (GM) with a view of finding a new investor for part of its South African operations after the United States vehicle manufacturer announced in May its intention to cease operations in this country by the end of 2017.
As General Motors prepares to leave South Africa, the company has entered into talks with Japan’s Isuzu to take over part of its assets.
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,” Deputy President Cyrile Ramaphosa told the National Assembly here Wednesday.
Nevertheless, an urgent process has been put in place by the Department of Trade and Industry to engage both General Motors and Isuzu with a view to ensuring that 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.”
He said an announcement would be made in due course.
Ramaphosa said the decision by GM to pull out of SA comes on the back of sustained efforts by government in recent years to assist the company. GM had informed government that it had not performed well in the domestic market recently, both in terms of production and sales, he added.
He said the lesson to 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. We are told that the decision by General Motors is informed by its global strategy, which includes exiting other markets such as Australia and India. In an increasingly competitive global market, countries compete for investment and production in the context of decisions made by global manufacturers, he said.
He added that against this background, the government was engaged in an automotive policy review and strategy process, working closely with a wide range of companies and industry associations. This process will develop a ‘Post-2020 Automotive Masterplan’, which will serve before Cabinet later in the year.
Meanwhile, at last month’s World Economic Forum on Africa in Durban, Team South Africa � consisting of government, labour, business and civil society � used the event to position South Africa as a destination for business and investment.
There was a particular focus on creating the conditions necessary for the diversification of Africa’s economies and the development of its industrial base,” he said.
The expansion of energy generating capacity and infrastructure was identified as essential to this effort, particularly the use of abundant renewable energy and the exploration of innovative financing mechanisms. South Africa’s experience in its renewable energy independent power producers programme was considered with particular interest.
He said at the conference, a need was identified for the development of policies that deepen African financial markets for financial inclusion, particularly for small, micro and medium enterprises (SMMEs) and entrepreneurs.
Source: NAM NEWS NETWORK