General Motors targets Zimbabwe growth

Published: 15 July 2014

CAR Manufacturer General Motors South Africa has identified Zimbabwe as one of its key growth markets in Africa as it targets increasing new vehicle sales on the continent.

GMSA vice president for operations Ian Nicholls said Africa had an untapped growing middle class which provided a potential market for its vehicles.

He said Zimbabwe was one of the countries where the company saw potential.

"We are excited about opportunities that exist in Sub-Saharan Africa and improved distribution. In Zimbabwe we have a new facility. We are making sure we have facilities in place," he said.

According to the company, other high potential markets are Nigeria and Angola.

GMSA vice president vehicle sales, service and marketing Brian Olson said new vehicle sales of the company's Isuzu trucks in Zimbabwe were up 42 percent in the first six months of the year compared to the same period last year. This is despite the total new vehicles market falling 10 percent in that period.

In Zimbabwe, GMSA has two dealers, Autoworld Bulawayo and Autoworld Harare.

Nicholls said the new vehicle sales market in Africa was relatively small compared to other continents.

He said about 1,7 million new vehicles were sold annually on the continent and the figures were expected to rise by 20 percent to two million by 2016.

South Africa is the largest market for new vehicles while Nigeria, the biggest economy in terms of Gross Domestic Product, only sells 50,000 new units a year.

Nicholls said the bourgeoning middle class on the continent - households with monthly income of $3,000 - was important for new car sales.

According to the International Monetary Fund, there are 100 million households in Africa that could be classified as middle class.

Nicholls said government investment in infrastructure such as roads, would also boost new vehicle sales on the continent.

Zimbabwe has embarked on major road rehabilitation programme with more than $200 million set aside for the upgrading of the Plumtree-Mutare Highway which is under way while there were also plans to upgrade the Beitbridge-Chirundu Highway.

GMSA manufactures Isuzu trucks at its Struandale assembly plant in Port Elizabeth, South Africa.

Journalists from various Sub Saharan African countries were invited to Port Elizabeth to test the new sixth generation Isuzu trucks on hilly off road tracks on a farm in the Zuurberg region.

Sixteen Isuzu models are available for sale in the Sub-Saharan Africa market.

Meanwhile, Nicholls said Isuzu petrol engines were not compatible with E15 blended fuel.

He said engines would have to be modified and motorists using E15 on the new Isuzu trucks would have their warranty voided.

Nicholls said the trucks, can however, run using E10.

"E15 will damage the engine and result in the loss of warranty," he said.

Zimbabwe has increased the ethanol content under mandatory petrol blending from 10 percent to 15 percent as part of efforts to cut the huge fuel import bill.

A number of car manufacturer representatives have announced that their engines were not suited for the increased ethanol content on the local market.
- chronicle