GM South Africa Expects A 20% Boom In Its Chevy and Isuzu Car Sales In The Next Two Years, Mostly In North Africa And South Africa Markets

 @MalikFromLA
on April 11 2013 9:58 AM
Pres-Zuma-at-GMSA
General Motors South Africa president and managing director Edgar Lourencon (right) shows South African President Jacob Zuma the Chevrolet Spark at the Struandale plant in Port Elizabeth. GMSA

General Motors Company (NYSE:GM) is betting that its next big international markets will be populous urban centers in Africa. The U.S. car giant sold 180,000 vehicles on the continent in 2012, giving it a 10 percent market share, just behind Toyota, which sold 237,000. The GM South Africa subsidiary (GMSA) anticipates hitting the 2 million-car sales mark sometime in the next two years as the growing middle classes in North Africa and South Africa trade up from motorbikes and jalopies to brand-new vehicles.

GMSA builds and ships 23 brands on the continent, including Chevrolet, Opel and Isuzu. Of its 180,000 total sales there last year, 100,000 were in North African countries and 70,000 were in the country of South Africa. That leaves only 10,000 in the more impoverished, sub-Saharan countries.

"That's where we see the huge opportunity for growth," GM South Africa managing director Mario Spangenberg told the Reuters Africa Investment Summit in Johannesburg. "The next big market growth will be in Nigeria, where we have no presence. We need to do a better job there."

Nigeria is the continent's most populous nation and its biggest oil producer, which makes it the most attractive prospect.

"We want to defend our 10 percent and maybe grow it a little bit," he said. One way GM hopes to increase its market share is with Isuzu's pick-up model, which is best suited for terrain outside of the big cities.

The African continent comprises a variety of markets, so the automaker has manufacturing plants in South Africa, Egypt and Kenya, but its management and coordination activities are consolidated in the Port Elizabeth region on South Africa's southern coast.

Spangenberg dismissed suggestions that Indian carmaker Tata Motors (TAMO.NS) is a threat to GM's African growth goals. "International competition is going to get tougher no matter where you are," he said.

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