General Motors exits South Africa – now what?

How will General Motors’ departure from South Africa affect those motorists who have bought or are considering buying Chevrolet, Isuzu and Opel vehicles?

General MotorsGeneral Motors (GM) has decided to exit the South African market by the end of 2017. This means it will cease all production and sales of its vehicles, and jobs for those working at the GM plants will be in jeopardy. For now, we know that motorists driving Isuzu and Chevrolet vehicles will definitely be affected, while Opel drivers will learn more later when discussions with Opel’s new owner PSA Group, which also makes Peugot and Citroen, are resolved.

It’s hardly a surprise that GM has decided to pack up and leave South Africa’s sunny climes – it is not the first major automaker to have done so. In the last two years Citroen, Daihatsu and MG have all pulled out of South Africa. After all, our economy is hardly a drawcard for international corporations to conduct business here, considering the country’s downgrade to junk status by ratings agencies Standard & Poor’s and Fitch (with a decision by Moody’s hanging in the balance) and slow growth forecasts.

Where does that leave me?

The good news is that manufacturing will continue, with Isuzu purchasing the light commercial vehicle operations in Struandale, Port Elizabeth. GM says Isuzu will deepen its presence in the country by establishing Isuzu Motors South Africa.

GM plans to exit by the end of 2017, subject to regulatory approvals. This means that if you are an Isuzu, Chevrolet or Opel owner, ongoing after-sales service and parts availability will continue through your existing GM dealer network until the end of this year.

Beyond that, Isuzu dealers will provide after-sales and service support to Chevrolet. It will provide the same services to Opel customers until the details of discussions with PSA Group have been finalised.

Isuzu’s new distribution network is set to launch in January 2018, and will support all Isuzu customers. GM have made assurances that all existing warranties and service plans remain in place and will be honoured beyond 2017 by Isuzu.

Rudolf Mahoney, head of brand and communications at Wesbank, warns motorists who own any of these brands not to make any hasty decisions following this announcement. “GM have assured us that there will be a supply of parts to the country for the next ten years and that services and warranties will be upheld. So we do not anticipate a massive fallout as the cars should maintain their value very well, so enjoy your car and hold onto it if you want to.”

Can I sell my vehicle back to the dealer?

If you are concerned, it is possible to sell your car back to the dealership that you bought it from. GM said on its South African website: “We stand by our products and don’t believe there will be a need for customers to sell their vehicles back to dealers especially as each vehicle’s warranties and after-sales service will be honoured.”

However, if you do want to sell your vehicle back, normal business practices will be followed whereby the value transfer will be a negotiation between dealer and customer. If you get less for your car than what you paid for it you could find yourself short on your loan, so consider all the options very carefully (such as selling your vehicle privately instead), and get financial advice from an accredited advisor if you are uncertain about how this will affect your finances.

Mahoney believes that motorists looking to bag a bargain would do well to consider buying GM makes, particularly the likes of Chevrolet. “It would be a good car to buy now as they (dealers) will want to let go of the stuff that they have so you could find good deals on the car,” he says.

He makes assurances that car finance and insurance will still be on offer: “Wesbank will finance as is and the insurance companies will continue to insure. I don’t see any change in that. We certainly do not see any risk. If anything it may work out for the consumer and there’ll be some good deals on the cars.”

More information can be found at www.gmsouthafrica.co.za. South African customers can contact the call centre on 0800 422 777 or email customercare@support.gmsa.com.

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