GM group vice president Maureen Kempston Darkes and General Motors SA president Bob Socia chat to CARtoday.com about the manufacturer’s plans and ambitions for South Africa.
GM group vice president and president of GM's Latin America, Africa and Middle East region Maureen Kempston Darkes and General Motors SA president Bob Socia chat to CARtoday.com about the manufacturer’s plans and ambitions for South Africa.
South Africa has been a democracy for 10 years, why has it taken so long for General Motors to return?
Kempston Darkes: The timing of the deal (GM’s acquisition of the 51 per cent of Delta it didn’t already own) was largely at the discretion of Delta’s management. Delta started negotiations with GM in 2001, but the incidents of September 11 and the ensuing global economic recession forced a postponement of the deal. Having said that, the management of Delta did a remarkable job to build a strong organisation that could be efficiently integrated into the GM family.
What will be General Motors’ biggest contribution to the African continent and in particular the Southern Africa region?
Kempston Darkes: Great products, efficient manufacturing systems and new technologies. Furthermore, Africa will benefit from GM’s global base of opportunities. We want to become integrated and form partnerships with our communities and give local suppliers the opportunity to grow as our organisation expands.
The Struandale and Kempston Road plants in Port Elizabeth currently produce vehicles for the African market and Delta also exports components for GM’s global supply chain. What are GMSA’s plans for the plants and is there a possibility of a fully built-up export programme to countries outside Africa?
Bob Socia: GMSA intends to continue building its business through the export of components. It is anticipated that, following the full integration of GMSA into GM’s production network, we will steadily increase the supply of components to the group’s manufacturing plants. It is thus in the company’s best interests to have growing, globally-competitive, local suppliers.
With the return of GM to South Africa, our attention turns to the development of a vehicle export programme. Most South African manufacturers either have – or are planning - vehicle export programmes, but the challenge lies in making such business viable in the long run. In the case of GM, we have to be careful how we put the plan together… We must first consider the capabilities of other GM subsidiaries to cater for the needs of their respective markets before GMSA can begin producing other types of product.
Isn’t GMSA worried that the crucial 25- to 35-year age group might feel indifferent to GM or Chevrolet because they won’t remember the “braaivleis and sunny skies…” days?
Socia: Finding the key to that particular part of the market is a challenge faced by all manufacturers, here and abroad, but we believe that the product must be able to sell itself and cater to the specific needs of the customer better than rival manufacturers can.
Kempston Darkes: GM will also market a spectrum of products targeted at the youth market… what we call “gotta have” vehicles.
Some members of the public are sceptical about former Daewoo products being marketed as Chevrolets in South Africa. Badge engineering may work on the US market, but South Africans are turned off by it. Samcor (now FMCSA) made the mistake of blurring the distinction between Ford and Mazda products in the ‘Eighties…
Kempston Darkes: GM never took over Daewoo. When the company went bankrupt GM bought some of its assets (two manufacturing plants) that now produce legitimate Chevrolet vehicles for several markets, including Latin America, where the models have been well received.
General Motors is a global brand producing vehicles tailored to the individual markets in which they are sold. Having said that, GM is currently developing entirely new products for the selfsame markets and will introduce the models in due course.
What can GMSA do to address the problem of vehicle affordability in South Africa… or is it something that government, financial institutions and manufacturers must deal with together?
Kempston Darkes: GMSA can gain leverage from its parent company’s global base of designs, components and platforms to take cost out of vehicles. But to do that local subsidiaries will need to see the right markets and target the appropriate vehicles to price, as they say, aggressively. Government should play a role too because the motor industry is a major contributor to GDP. Nevertheless, the biggest remedy for the problem of affordability will be low, stable interest rates, good infrastructure and a growth in disposable incomes of households.
Socia: There’s not just one lever that you can pull. It all comes down to offering the best quality at the lowest price. GMSA has the benefit of a global team that can help to make the right decision with regard to products, target markets, manufacturing technology etc, but our success will in the end be measured by how well we understand the needs of the South African customer.
Is there any chance that attention-grabbing, imagination-capturing image-building models such as Corvettes or Cadillacs could be brought to South Africa in right-hand drive form?
Gus Buenz (director of communication General Motors LAAM): Is there a big enough market for vehicles like that in South Africa? General Motors is a volume producer and does not specialise in limited run products, but we listen to the public… if there is enough demand, and we have the right product to satisfy it, why not!
Would GM be willing to develop right-hand drive Corvette models, for example, if the company targeted European markets as areas where it wanted to increase its presence?
Kempston Darkes: The European market is certainly an area we have targeted for future growth, and that’s why we are developing products that will have a global presence. Remember, selling a product like the Corvette (built specifically for the requirements of the US market), in Europe or South Africa in limited numbers might not be a particularly profitable exercise.
Finally, can South Africans expect GMSA’s management to make immediate and wholesale changes to the way that Delta conducted its business?
Socia: I don’t think there is a need to demonstrate change. There will be changes to the organisation, but Delta had, to date, been managed well enough. Customers can expect a change in the way that they have associated with brands incorporated in the GM stable. There is a plan in place that should, if economic conditions stay as they are, see GMSA achieve strong growth this year.
Original article from Car