As a result of a global business transformation, General Motors (GM) is closing its South African operation. As a part of this process the sale and manufacture of Chevrolet vehicles will be phased out by the end of 2017, Ian Nicholls, GM South Africa president and managing director highlighted in a statement.
However, the company has stressed that all customers will continue to receive after sales support. “Chevrolet, Opel and Isuzu customers can continue to expect the same level of service and after sales support across all three brands by the existing GM dealer network and future dealer networks. All existing warranties and service plans remain in place and will be honoured. During the next few months we will implement various initiatives to effect these changes across the business,” said Nicholls.
Furthermore, GM pointed out: “We stand by our products and don’t believe there will be a need for customers to sell their vehicles back to the dealers, especially as each vehicle’s warranties and after-sales service will be honoured. However, should a customer want to sell their vehicle back, normal business practices will be followed, whereby, the value transfer will be a negotiation between the dealer and customer.”
The future of the business and brands
Isuzu is purchasing GM’s light commercial plant in Struandale, Port Elizabeth where manufacturing will continue. They will continue to provide aftersales and service support for Chevrolet vehicles from 2018.
GM has reached an agreement with PSA Group, a multinational vehicle manufacturer, for the purchase of Opel. Nicholls noted that GM has continued to work with PSA to evaluate future opportunities for the Opel brand in South Africa. Until the discussions have been finalised, Isuzu will continue to provide aftersales and service support for Opel vehicles from 2018.
The company added: “In terms of Opel, following the recent announcement of the sale of Opel to the PSA group, GM will work with PSA to develop the future strategy for the Opel brand in South Africa.”
When asked how GM leaving the SA market may affect the value of the vehicles, AutoTrader CEO, George Mienie said: “On the basis that Isuzu do a great job in setting up their dealer network under Isuzu Motors South Africa, I don’t foresee the Isuzu brand being affected negatively. The jury is still out on Opel given that General Motors is currently in talks with Opel's new owner PSA in France. If all goes well for Opel in SA, I don't see the brand being negatively affected in the long term. With regards to Chevrolet not having representation from a new car perspective in SA as announced by GM, we would be naive to think that the current value of this brand would not be affected. This problem would be mitigated if GM sticks to their word on aftersales support for the next 10 years.”
What if your vehicle is on finance?
For those who have purchased a GM vehicle on finance, don’t worry. When asked, GM told Justmoney: “This contract sits between the customer and their chosen bank and is not influenced in anyway by GM’s decision.”
As previously highlighted, all existing warranties and service plans will remain in place and be honoured.
When asked if customers had approached GM regarding vehicle trade-ins following the announcement, it stated: “We stand by our products and don’t believe there will be a need for customers to sell their vehicles back to the dealers, especially as each vehicle’s warranties and after-sales service will be honoured. However, should a customer want to sell their vehicle back, normal business practices will be followed, whereby, the value transfer will be a negotiation between the dealer and customer. The focus right now is on the transitioning of the business to the new structure. At this stage it is too early to speculate on the customers actions.”
The resale and second hand market
What about the future value of your vehicle? Unfortunately this may be a difficult question to answer. GM told Justmoney that this is linked to a number of variables, and normal market forces dictate the resale values at the time the customer decides to replace the vehicle.
At present there does not appear to be cause for alarm, as GM has frequently stressed that all warranties and after-sales services will be honoured. Furthermore, spare parts for Chevrolet vehicles will continue to be available for 10 years after the production of the vehicles has ceased.
According to AutoTrader, there has not been any unusual movement in used cars for sale listings on the website since the announcement by GM. “The number of Isuzu’s, Opel’s and Chevs’ when we compared the numbers, they’re flat around 17 000 listing on our site.”