General Motors’ regional head in Africa said that in the next couple of years, its annual vehicle sales are expected to increase by almost 20% to reach the 2 million mark as the growing middle class has been upgrading from motorbikes and jalopies to new cars. Last year, GM sold 180,000 vehicles in Africa, accounting for a market share of 10% and placing it narrowly behind Toyota, which posted sales of 237,000 in this continent.
But of GM's total sales, 100,000 were delivered to North Africa and 70,000 were sent to South Africa, which means that just 10,000 went to the poor but quick-growing countries in between. At the Reuters Africa Investment Summit in Johannesburg, GM Africa managing director Mario Spangenberg said that this is where they see a big opportunity for growth.
In Africa, GM’s sales volumes in Africa are regarded to be very small. Last year, GM posted sales of 6 million vehicles outside its traditional U.S. market. Spangenberg wants to take advantage of the growing overall market in Africa, considered to be one of the regions in the world with the fastest growth.
He also hopes to widen GM’s market share with models like the Isuzu pick-up, which has proven to be durable for Africa's tough conditions.
He said that he hopes to at the very least, maintain its 10% share and maybe grow it further. Africa has about 40 sub-Saharan frontier markets. Nigeria is considered to be the most appealing market as it’s the most populous country and is its largest oil producer.
Spangenberg said that it will take some time to have a presence in Nigeria though. He denied that GM’s expansion plans in Africa are being placed at risk by the arrival of Indian manufacturers like Tata Motors with its experience of producing and selling cars in comparatively low-income markets.
In January, it was reported that GM would be investing $600 million in its Fairfax Assembly and Stamping Plant to construct a new 450,000 square-foot paint shop as well as install a new stamping press. Other upgrades are also on the way. The Fairfax Assembly and Stamping Plant project is consided one of the biggest plant investments that GM has ever made, building on nearly $2 billion already invested in the site in the past decade.
GM will commence construction of the plant later this year, with the whole project taking around two years to complete. Once completed, it would expand the footprint of the Fairfax Assembly and Stamping Plant by around 15 percent to 3.7 million square feet.