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Investor Confidence in South Africa Received a Boost
Investor confidence in South Africa has received a boost with the official launch of Isuzu Motors South Africa (IMSA) in Port Elizabeth. The official launch follows an announcement made last year that Isuzu would purchase the light commercial vehicle operations in Port Elizabeth and also the balance of shareholding in its Isuzu Trucks South Africa operations. The launch also follows General Motors disinvestment in South Africa last year as part of a broader, international strategic restructuring position by the company to exit certain markets as witnessed by the recent (last week) announcement by General Motors to pull out of South Korea later this year. Isuzu Motors has purchased the Struandale plant in Port Elizabeth which belonged to General Motors and the remaining 30% shareholding in the Isuzu Truck South Africa joint venture. Isuzu Motors, consolidated into one business now known as Isuzu Motors South Africa, became effective from January 2018 and will build Isuzu pick-ups and trucks.
Speaking at the launch, Minister Rob Davies said that the investment by IMSA will save jobs.
“We know that this investment will mean that a 1 000 jobs in the facility will be saved and there are 3 000 jobs in the direct supply chain and many thousands more in the supply companies; jobs will continue to be guaranteed in the future,” said Davies.
According to Minister Davies, South Africa’s automotive industry is a global, turbo-charged engine for the manufacture and export of vehicles and components. He said many of the major multinational firms use South Africa to source components and assemble vehicles for the local and international markets.
“With its ability to link throughout the economy, the government has identified the automotive industry as a key growth sector. The auto industry is important to the future of manufacturing in this country and whatever emerges in the future will be based on a significant level of support for it going forward. The sector contributes 7.5% of South Africa’s Gross Domestic Product and employs about 113 000 people directly. It is key to ensuring greater economic growth,” added Davies.
He highlighted that government is committed to supporting the local production of vehicles in order to boost the economy and exports as well as create jobs.
“The automotive and components industry is well-placed for investment opportunities, and our commitment to local vehicle production is marked in our Industrial Policy Action Plan with a prime focus towards adding value in the manufacturing and industrial sector. Export promotion, job creation and inclusive growth remain as the fundamentals to this policy,” indicated Davies
The industry has exhibited significant growth under the Motor Industry Development Programme (MIDP) and its successor, the Automotive Production and Development Programme (APDP), which was implemented in 2013 aiming to stimulate the expansion of local production to 1.2 million vehicles a year by 2020 while significantly increasing local content at the same time.
Furthermore, Davies added that companies with production plants in South Africa are placed to take advantage of the low production costs, coupled with access to new markets as a result of trade agreements with the European Union and the Southern African Development Community Free Trade Area. Opportunities also available in the production of materials such as automotive steel and components.
The President and Representative Director of Isuzu Motors of Japan Masanori Katayama said that Isuzu was committed to growing its business in South Africa.
“This is the first commercial and light commercial vehicle manufacturing operation outside of Japan in which we have acquired a 100% ownership. We are represented in 30 countries outside of Japan and successfully operate 47 manufacturing plants in these countries with joint venture partners. Our decision with regards to South Africa demonstrates the confidence we have in this market and also is indicative of our longer-term view that South Africa will serve as an important base for our future growth on the African continent.”, Katayama
Isuzu used the launch to reveal the company’s new SUV segment contender‚ the Isuzu MUX (Multi Utility Crossover).
Sidwell Medupe-Departmental Spokesperson
Tel: (012) 394 1650
Mobile: 079 492 1774
Issued by: The Department of Trade and Industry
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