General Motors (GM) has announced its intentions to stop production and sale of its vehicles in South Africa by the end of 2017. GM has denied that the move was influenced by South Africa’s recent credit ratings downgrades and has said it is restructuring its business towards more profitable markets, including the US and China, where it could achieve greater return on investments than in South Africa.
Rob Davies (pictured), minister of the Department of Trade and Industry (dti), said in a statement that while the dti does not welcome GM's decision, the future of the automotive industry remains positive. He said:
"While it is regrettable to see GM 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."
In preparation for its exit, GM will sell its Port Elizabeth-based light commercial vehicle manufacturing plant to Japan-based Isuzu Motors. Isuzu will also buy GM's 30-percent stake in Isuzu Truck South Africa.
