The Opel Corsa pick-up, SA's best-selling small bakkie for the past five years, is about to disappear. Or is it? The Kempston Road assembly plant in Port Elizabeth, the home of General Motors SA (GMSA) for more than 80 years, is about to be closed down. Or is it?
These are tumultuous times for the SA subsidiary of what used to be the world's biggest motor company. However hard former boss Steve Koch tried to insist it was business as usual in SA while the US parent collapsed into government ownership, that clearly was not the case.
The sale of the Hummer 4x4 brand to a Chinese company cost GMSA its main export product and billions of rand in foreign-exchange earnings. The intended disposal of Opel (now cancelled) to a Canadian-led consortium that included Russian interests was also unsettling. So was the post-collapse restructuring of GM's worldwide operations. Until recently GMSA was part of the corporation's Latin America/Middle East/Africa region and took its engineering and product instructions from Brazil. Now Africa is a stand- alone region reporting directly to GM's international operations division based in Shanghai, China.
So it's mildly ironic that the man who will lead GMSA out of the post-Brazil, post-Apocalypse era is a Brazilian. Edgar Lourencon, recently appointed president and MD of GM Africa, of which GMSA is the base and driving force, joined GM Brazil in 1977 with a degree in production engineering. He started as an engineer and has since had experience in sales, marketing, customer relations, quality assurance, exports and trade development.
Before taking over in PE on November 1, he headed GM operations in Argentina, Paraguay, Uruguay, Chile, Bolivia and Peru.
Barely a month into his new job, Lourencon (53) is already running to keep pace with changes at GMSA. The company is scaling down operations at Kempston Road and shifting them to the modern Struandale plant a few kilometres away. Some truck assembly and warehousing activities remain at Kempston Road but Lourencon expects everything to be out within two years.
No decision has been made yet on the future of the old site, which is still the corporate HQ, but partial or complete sale is an option.
There's no such uncertainty over the future of the Opel Corsa pick-up. From early next year it will be rebranded as a Chevrolet. It's part of the GMSA strategy to make Chevrolet its core brand and reposition Opel as a lower-volume, high-performance brand. The renaming will be done from a position of strength: Corsa has been SA's top-selling half-ton pick-up for 55 consecutive months.
Lourencon must also prepare GMSA for the automotive production and development programme (APDP), which will govern the SA motor industry from 2013. The biggest challenge will be to meet the minimum annual production threshold of 50 000 vehicles to qualify for production incentives. Unlike nearly all its local competitors, GMSA does not have a significant export programme and Lourencon says the company will continue to base production targets on domestic demand. "Of course exports are important but our priority remains the local market."
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For the foreseeable future, GMSA will maintain its two-product assembly strategy centred on two pick-up ranges, the little Opel/Chevrolet and bigger Isuzu KB. It will also continue to build Isuzu trucks from imported kits.
The company expects to build about 38 000 vehicles this year. If the new-vehicle market starts to pick up as expected from 2010, Lourencon believes GMSA will cross the 50 000 threshold by 2010. But he admits a couple of sizeable export contracts would bring peace of mind.
He would like to think Africa will provide that security. Though GM also has assembly plants in Kenya and Egypt, SA is Africa's main producer and Lourencon hopes GM's sales growth across the continent will provide opportunities for SA. But he is realistic. Like so many before, he knows he must be patient. "At GM, we see Africa as a market with great potential for the future. But when that future will happen we are not sure."
Lourencon is married, with four daughters aged from eight to 21. His wife is also an engineer.
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