After more than 90 years, General Motors is leaving South Africa, and South Africans aren’t handling the separation very well.
The US car company announced May 18 it will cease manufacturing and the sale of Chevrolet cars in South Africa by the end of the year. The company’s plant in the coastal city of Port Elizabeth will be taken over by Isuzu, hopefully avoiding the loss of nearly 2,000 jobs in the city that is known as South Africa’s car-making hub. GM called it “a business decision, based on GM’s global business priorities” which include a strategy to increase profitability (pdf) in a changing passenger-vehicle market.
GM’s decision comes months after French car manufacturer Citroën backed out of the South African market. GM has also decided to stop selling cars in India, the world’s fifth largest car manufacturer where the car maker has struggled to compete with Japanese and Korean vehicle manufacturers.
South Africans received the message as more bad news in an already pessimistic economy. The decision comes weeks after credit ratings agencies downgraded South Africa’s credit rating. The main opposition party, the Democratic Alliance, saw it as the government’s failure to create local jobs and restore international investment, even blaming recently appointed finance minister Malusi Gigaba.
“It must worry us, as a country, living in a high-tech industrial age, that we do not produce our own automobiles,” said the Economic Freedom Fighters, the second opposition.
South Africa is still home to manufacturing plants for Volkswagen, Ford and others. While GM has been in the country since 1926, it has lately struggled to compete in a more open post-apartheid market, with vehicle sales falling consistently in the last five years.
The South African government plans to launch a “master plan” in the coming year to boost domestic manufacturing.