By Bob Kernohan Business Editor
IN another major investment boost for the Eastern Cape, General Motors South Africa announced yesterday it would spend R620-million this year, mainly on upgrading its Nelson Mandela Bay manufacturing plants.
GMSA president and managing director Bob Socia said the new investment by the world‘s No 1 vehicle maker would take its total spending on plant, equipment and new models to R2,6-billion since its return to South Africa in 2004.
Although no new jobs will be created, the investment signals a clear commitment to the lucrative Port Elizabeth plant, which employs about 4 000 people.
He gave the figures at a media conference in Johannesburg yesterday at which he said the first Cadillacs to be launched in South Africa for more than 40 years were on their way to the dealerships.
It was also announced the introduction of the Cadillac models was being accelerated and a luxury new sports utility vehicle was being launched at the same time as the upmarket BLS sedans, the arrival of which were first announced late last year.
Socia said the introduction of Cadillac models signalled the company‘s intention to increase significantly its presence in the luxury segment of the South African market.
“Cadillac forms an important part of our plan to grow our business and share of the market in South Africa.”
Socia said the South African market would continue to grow and would probably increase by 5% to 6% this year. “Eventually this will become a market of one million units per annum but only those players that are able to effectively gear up their operations to a service a market of this size, will be sustainable for the long-term.
“We are confident of our future in South Africa and will be undertaking investments which will increase the capacity of our operations as well as our ability to reach more customers and provide them with a broader range of choice.”
Socia said during the past three years, GMSA had invested R2-billion into its operations and had created 500 jobs, mostly in the Eastern Cape, with the Hummer programme.
This year, the operation would invest a further R620-million on new tooling and facility and equipment upgrades for upgraded models, including the Isuzu KB pick-up range, produced at Kempston Road, and other new models. However, no new jobs would be created with the latest round of investment.
Turning to the Hummer, which is produced at an extension to the company‘s plant at Struandale in the northern part of Port Elizabeth, Socia said the company was exporting left-hand drive Hummer H3s to markets in the Middle East, Israel, Europe and Asia Pacific.
The right-hand-drive version of the H3 would be exported to various markets later this year and would be launched in South Africa in May.
“We are one of only two plants in the world to produce Hummer – the other is in Louisiana in the US.”
Socia said 2006 had been a record one for GMSA which sold 87 121 vehicles, thereby increasing volumes by 13,7% versus the previous year.
Newly appointed Cadillac brand manager Billy Tom said that the new models would be sold in multi-brand facilities alongside Saab and Hummer.bkernohan@johnnicec.co.za