After many months of silence since General Motors decided to pull out of South Africa, Isuzu Motors has come out of its closet by announcing the official launch of its business operations in South Africa. This follows the announcement last year where Isuzu said it would purchase the light commercial vehicle operations in Port Elizabeth and also the balance of shareholding in its Isuzu Trucks South Africa operations.
Speaking at an event attended by around 1 700 people – which included factory staff – held last week at the manufacturing plant in Struandale, Port Elizabeth, 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 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 is also indicative of our longer-term view that South Africa will serve as an important base for our future growth on the African continent.”
Isuzu is making positive strides in Africa and a year ago the company acquired a 57.7% majority shareholding in the Kenyan truck and bus assembly operation which supplies Isuzu vehicles to East African markets, while commanding a leading 34% share of the Kenyan new vehicle market.
Isuzu also has a 20% shareholding in joint venture manufacturing operations in Egypt where the company has led in the market for 10 years in a row. The light commercial vehicle pick-up which is produced there and accounts for over 90% share of the market segment, is derived off the Isuzu KB pick-up.
Also speaking at the launch event, Isuzu Motors South Africa CEO and MD Michael Sacke said the company’s initial focus will be to fully consolidate its operations while laying the foundation for the company’s future success.
“Our short-term focus is on implementing our transitional plans, ensuring the sustainability of our operations, further strengthening our product portfolio and relocating the truck operations from Kempston Road to the Struandale plant. As we do this, we will need to demonstrate excellence in everything we do and the ability to lead in key segments of the market.”
He said that in the medium term the company would need to plan for the successful launch of future products, implement measures to increase its domestic market share and increase its exports into Sub-Saharan Africa markets.
Sacke said the company was already making good progress in achieving these objectives and that last year, Isuzu trucks accounted for around 15% share of the medium and heavy commercial market, thus cementing its leadership position in these segments of the market for over five years in a row.
“In 2017, and in an environment where we were transitioning our business to a new business model, we grew our Isuzu KB volume by 14.8% versus the same period last year. This gave us a share of 14% in the pick-up D segment of the market, thus demonstrating the confidence that South African consumers have in our brand and vehicles.”
Sacke emphasised the important role the South African government has played in enabling the establishment of the new company. “There can be no doubt that this government is committed to preserving and growing the automotive industry in South Africa.”
Masanori Katayama commended the South African employees, dealers, suppliers, government, customers and other key stakeholders for their tremendous support in ensuring the successful launch of Isuzu Motors South Africa. “Your efforts have been exceptional and give us confidence that this will become a flagship operation for Isuzu Motors.”
Isuzu Motors sells vehicles in over 120 markets and has a leading share in many of the segments in which it competes in 42 of these markets.
The Minister of Trade and Industry, Dr Rob Davies, who attended the launch and then had to rush off to suit up for President Cyril Ramaphosa’s first SONA address as the new President of South Africa, said 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,” said Davies.