23 October 2006
Japan’s Isuzu Motors and General Motors South Africa (GMSA) are to invest R80-million (R40-million each) in a new joint venture company that will take over the marketing, sales and support of all Isuzu trucks weighing over 3.5 tons in SA and its neighbouring countries.
The investment comes on the back of booming vehicle sales and strong economic growth prospects for the country as a whole.
South African new vehicle sales hit an all-time record of over 617 000 units in 2005 – up from 480 879 units in 2004 and 381 456 units in 2003 – making the country one of the best performing automobile markets internationally.
The year’s sales were driven by in large part by trucks, with light commercial vehicle sales up by 25.9% over 2004, medium commercial sales up a massive 41.8%, and heavy commercial sales up 24.5%.
“The South African market scale is likely to grow as big as the Australian market scale,” Isuzu said in a statement on Monday.
To date, GMSA has been marketing and distributing Isuzu-make trucks and pickups in South Africa along with its own GM-brand passenger cars.
Now, Isuzu and GMSA have agreed to establish Isuzu Truck South Africa (Pty) Limited as a joint venture company capitalised at R80-million – 50% held by Isuzu and 50% held by GMSA – to enable Isuzu to get more involved in the commercial vehicle business in southern Africa.
While GMSA will continue to handle distribution of Isuzu’s 1-ton light commercial vehicle range, Isuzu Truck SA will handle the medium and heavy trucks, starting in January 2007 (subject to local competition authority approval).
GMSA’s Malcolm Gould told Business Report on Friday that Isuzu Truck SA would spend R350-million over two years on upgrading the current Isuzu truck national retailer network and expanding GMSA’s Isuzu truck assembly capacity at its Kempston Road plant in Port Elizabeth.
Isuzu said it plans to grow its market share for commercial vehicles in South Africa from 8% in 2005 (2 307 units) to 13% in 2007 (3 500 units) and 20% in 2010 (5 600 units).
Gauld told Business Day that Isuzu Truck SA would operate as a separate entity with offices in Johannesburg and 48 members of staff, including 40 new positions as well as two senior secondments from Isuzu Motors Japan: Masatoshi Kobayashi (MD) and Hiroshi Iizuka (business co-ordination and special projects manager).