General Motors (GM) expects the framework agreement it signed with Isuzu Motors last week to be a game changer in terms of the volume of vehicles it produces at its assembly plant in Port Elizabeth.
Ian Nicholls, the president and managing director of GM sub-Saharan Africa, said yesterday that the agreement would result in improved production volumes at its plant in both the short and longer terms “but the significant step-up will be in the longer term”.
Nicholls added that South Africa was fast developing into a pick-up hub similar to Thailand, with the Ford Ranger, Toyota Hilux and Isuzu produced locally.
Much higher levels of localisation were fundamental to GM increasing its production volumes in South Africa.
“With all the pick-up manufacturers having similar component supplier bases, there is a lot of opportunity to grow incrementally across all of those,” he said at a function in Johannesburg, where the company launched a new customer care initiative.
Nicholls said a lot of work had gone into the signing of the framework agreement with Isuzu Motors but they had now got to the point where even more work had to be done “to get the definitive agreements of when, how, how much and all the rest of those questions”.
Isuzu Motors had insight into the South African market and the scarcity of electricity and in dealing with trade unions because GM had a joint venture on the truck side of the business with Isuzu Truck South Africa in terms of which GM assembled medium and heavy-duty trucks for Isuzu.
“They have had Isuzu management in the plant in Kempston Road (Port Elizabeth) for the past few years. It’s not as if they are going into unchartered territory and they have their own insights into the market here,” he said.
Isuzu Motors knew the South African market but parts of the sub-Saharan African market was uncharted territory and Japanese companies were quite conservative and risk averse.
But Nicholls said Isuzu Motors saw GM’s knowledge about the sub-Saharan Africa market as something “we can bring to the party”.
“They believe that we can support them in sub-Saharan Africa from (in terms of) what a customer wants and they can bring the product,” he said.
GM said on Friday that the framework agreement signed with Isuzu Motors “serves as confirmation of GM’s commitment to the long-term future of its operations in South Africa”.
Brian Olsen, GM’s vice-president of vehicle sales and marketing for South Africa and sub-Saharan Africa, said the new “Complete Care” customer care initiative was a global campaign and reaffirmation of their commitment to provide outstanding sales and after-sales service to customers.
Olsen said GM’s research in South Africa had shown that customers did not realise that all the various customer care elements they provided came with the vehicle they had bought and owned.
“What we are attempting to do is to package them together in a way that is easier for our existing owners and potential owners to understand.
“Our mission at GM is to earn customers for life,” Olsen explained.