The Isuzu SA plant in Struandale, Port Elizabeth has been home to the locally-built KB bakkie, now known as the D-Max, since the early 2000s.
In 2017 when General Motors announced it was jumping ship out of SA, Isuzu decided to stay on and continue building vehicles.
On Monday (Nov 11) Isuzu Motors of Japan confirmed that it will be investing R1.2 billion into the next-generation bakkie programme in South Africa, while an additional total local content value of R2.8 billion will be generated through the lifecycle of the programme, the auto maker said.
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So why is this a big deal for the automaker if it was already building the previous KB, and now the current D-Max model here?
It means 1000 employee jobs have bee saved, along with 4000 jobs through its dealer network, and many more through its base of 430 suppliers in South Africa.
If South Africa had not been given the contract to build the next-gen bakkie, not only would 1000 jobs be lost, but the automaker would then just be distributing sales, and we would have to import the vehicle, inevitably seeing an increase in its competitive pricing due to its current local production.
Isuzu says this milestone development follows the firm’s take-over last year of the company's light commercial vehicle operations, as well as the balance of shareholding in the trucks business.
The automaker says current plans are to grow the company’s annual bakkie production to 29 000 units per annum, said Yoichi Masuda, Senior Executive Officer for Isuzu Motors Limited and Chairman of the Isuzu Motors South Africa Board: "Our decision to invest in the production of the next generation bakkie in South Africa demonstrates our commitment to this market.
"This is further reinforced by the fact that this operation is the first bakkie and truck manufacturing and distribution operation which is 100% owned Isuzu operation outside of Japan.”
The automaker says South Africa will initially serve as the main market for the next generation bakkies but with growing volumes expected to be generated from the roll-out of its Sub-Saharan Africa growth strategy, which will be geared at further strengthening its position in key markets as well as its overall distribution footprint.
"The next generation bakkie will be locally engineered to meet the requirements of the South African and key Sub-Saharan Africa markets.” said Michael Sacke, CEO and Managing Director of Isuzu Motors South Africa.
"Our customers have come to know our vehicles for their reliability, durability and flexibility and it is important that we continue to build on these strengths.”
Isuzu’s biggest markets in Sub-Saharan Africa currently include Kenya, Zimbabwe, Zambia, Mozambique, Mauritius, Senegal, Ghana and Ivory Coast. Last year the company’s sales in these markets increased by 17% versus the prior year.
Masuda emphasised the important role the government’s Automotive Production and Development Programme plays in providing predictability and stability for investors when making long-term business decisions.
“We fully support the requirements of the extended APDP and are working on various initiatives to ensure that we contribute to the achievement of the South African Automotive Master Plan aspirational targets over the coming years. Furthermore, I would like to acknowledge the instrumental role the South African government has played in enabling us to successfully operate in this market since January 2018."
The Minister of Trade and Industry, Ebrahim Patel, has welcomed the announcement saying it will contribute immensely towards President Cyril Ramaphosa’s investment drive.
"This investment shows confidence in the South African economy’s growth potential and will help to secure more than 1000 direct jobs at the plant. The South African Automotive Master Plan, developed in partnership between government and industry, provides a good basis for companies to plan and gives policy certainty on which investment decisions can be made," Patel said.
Compiled by Janine Van der Post