The regional driver, South Africa, has an established auto industry and is experiencing solid growth. It’s where the auto maker’s key Port Elizabeth assembly plant is located and its Sub-Saharan Africa operations are based.
GM South Africa believes it has right products to succeed.
GEORGE, South Africa –is making a determined pitch to expand its presence on the African continent with a renewed effort to build and sell products here for the long term.
The biggest slice of the region falls under Sub-Saharan Africa, which includes 46 diverse markets, with South Africa as the cornerstone.
Edgar Lourencon, president and CEO of GM’s regional unit, cites a recent International Monetary Fund report that says five out of 10 of the world’s fastest-growing economies this year will be in Sub-Saharan Africa. The average growth across the region over the past decade has been a respectable 5.5%, the IMF says.
There are many challenges for the auto maker, not the least of which is the more than 1,000 languages spoken in the region.
Aside from South Africa, “the markets that present the highest potential for us include Angola, Nigeria, Zimbabwe, Kenya, Mozambique, Ghana, Senegal and Ethiopia,” GM spokeswoman Caroline Thomas says.
It’s a “very interesting and growing region,” Lourencon tells WardsAuto at a media event. He is quick to note South Africa is a member of the G20 because of its rising economy, and it also is considered among the auto industry’s important emerging markets.
Brazilian-born, Lourencon arrived in South Africa with an in-depth understanding of emerging markets, having simultaneously served as president and managing director of GM Chile, Bolivia, Peru, Argentina, Paraguay and Uruguay.
He believes the credentials for this region are firmly in place to play an important role in GM’s global picture. The regional driver, South Africa, has an established automotive industry and is experiencing solid growth. It is where the auto maker’s key Port Elizabeth assembly plant is located and GM Sub-Saharan Africa operations are based.
“This is a very competitive market,” says Lourencon, noting there are seven OEMs assembling here and 50 brands represented. “The only thing is to have winning products.”
GM South Africa employs 2,000 workers and has 136 dealers. With a slew of new arrivals in the showrooms, topped off by the recently introduced Chevrolet Trailblazer SUV, the auto maker believes it has the right products to succeed.
GM sells three brands – Chevrolet, Opel and, with which it has deep ties in Africa.
Each brand is focused on a different demographic, and the three have a combined South African share of about 12%. Sales last year surged 50% and this year are forecast to grow another 12%. October deliveries accounted for 11.6% of the market, with 6,716 units.
With such positive news, GM unabashedly is positioning its brands against the South African heavyweights,and .
Volume-brand Chevrolet, with a 7% share, is in the rebuilding phase after being reintroduced in 2003. Chevy first arrived in South Africa in 1913 and started local assembly in 1926. To date, GM has built 2.8 million vehicles in the country. But after its long absence, Chevy today is considered a relatively young brand that “is growing fast,” Lourencon says.
German Opel has a 1% share and “fits a niche just above Chevrolet as a semi-premium brand,” he adds.
Although not one of its in-house brands, GM builds and distributespickups across the region. "We have a very strong partnership with Isuzu in Sub-Saharan Africa," says Lourencon, “and by choosing the D-Max (KB pickup) rather than the (Chevy) Colorado, it keeps Chevrolet fully focused as a passenger-car (and SUV) brand.”
Adds Thomas: “Isuzu has long been an established player in this market, and it makes sense to continue producing and selling that brand throughout our region. In October, we celebrated 33 years of Isuzu production in South Africa and 40 years of light-commercial-vehicle production.”
The first Isuzu KB pickup was launched in 1972, albeit branded a Chevrolet. The Isuzu name replaced it in 1979. The new version will be the sixth-generation Isuzu pickup to be built in South Africa by GM.
“To date, we have built more than a half-million Isuzu KBs at our production facilities in Port Elizabeth,” Thomas says. “The majority of these vehicles have been sold in South Africa and in some of our neighboring countries.” GM also has been producing Isuzu commercial vehicles in Kenya for 35 years, she notes.
Lourencon, who has just completed three years on his current assignment for GM and almost two years as part of the wider-reaching Sub-Saharan Africa operations, sees South Africa as ready to reap the rewards of GM’s updated product line up, thanks to a 1.3 billion rand ($150 million) investment, of which ZAR880 million ($100 million) was earmarked for new vehicle lines.
In addition to the Trailblazer SUV and Isuzu KB truck this year, a facelifted Chevy Spark and new Opel Astra OPC will launch in first-quarter 2013.
Lourencon points to the results of a recent Ipsos quality survey, which serves as the African automotive-survey benchmark, and says Chevrolet showed a 38% improvement from year-ago. The Spark “was the best-quality vehicle in South Africa, so for the first time in the history of our company we have been best in Ipsos.”
GM South Africa also was awarded two silvers and a bronze by Ipsos. Lourencon has a background in this area too, having previously served as GM’s director responsible for quality in Latin America.
GM’s key products in South Africa are the Chevy Spark, Utility, Cruze, Sonic and Aveo, with each among the top sellers in their segments.
The new B-segment Utility “bakkie” arrived late last year, replacing a model that accounted for half the segment’s sales at its peak. Deliveries of the new model brought it to 53.5% in October.
The Spark and Sonic were among the top 10 best-selling sedans last month, with the Cruze hatchback having just a month under its belt.
Lourencon says GM is chasing the benefits of boosting local production to balance completely built-up tariffs that range from 20% and upwards, explaining that South Africa offsets import duties against local production.
The latest product to join GM’s product mix is the D-segment Trailblazer SUV, which puts Chevrolet head-to-head with’s segment-leading Fortuner. It also gives GM a halo for dealer showrooms as the pinnacle of its updated vehicle range.
Lourencon, who has been with GM for 35 years, is adamant the Trailblazer "is a very important product for the South African market.”
The SUV slots above the Captiva cross/utility vehicle, which also is enjoying a surge in popularity, with sales up 22% to 2,077 units through September. The increase mostly is attributed to the introduction of the 2.2L diesel model.
Lourencon says GM ships very few vehicles from South Africa, but that is about to change. When the new-generation Isuzu KB arrives next year, “it will be exported across Africa,” with an annual CBU target of about 10,000 units. He reckons the new pickup will help drive GM’s big push through Sub-Saharan Africa.