Chrysler and Dodge are the latest car brands to announce their exits from South Africa. Fiat Chrysler Automobiles (FCA) announced the two makes will no longer be available locally. In the past year Citroen, Chevrolet and General Motors (GM) have pulled out of the local market.
AutoTrader, CEO George Mienie says the political climate is not solely to blame for manufacturers’ departures and South Africa is not alone in suffering from the consolidation of production sites. Globally the automobile industry was weakened by hikes in fuel prices years before the 2008 economic crisis.
GM, Ford and Chrysler had made sport utility vehicles (SUVs) and pick-up trucks their primary focus, but saw their popularity diminish in line with rising fuel costs given their fuel inefficiencies.
Elsewhere, India and Australia have suffered the same fate as South Africa. GM stopped manufacturing several years ago and announced in May it will stop selling the Chevrolet car brand in India at the end of this year.
However, there are swings and roundabouts – Tesla looks set to enter the South African market with its new electric-driven Model 3 sedan as founder Elon Musk includes his country of birth in the seven-strong list of countries added to the vehicle’s order page.
Last year Volkswagen South Africa invested R5.5 billion into new product development and expects the local car industry to grow significantly. Toyota South Africa invested R6.1 billion into its Prospecton-based manufacturing facility as the platform for growth locally and regionally. Correspondingly, BMW South Africa recently invested R6 billion into its Rosslyn plant as part of its long-term view on its investments.
Ford has been operating in South Africa since 1923 and remains committed to the country. The company has doubled the amount of vehicles assembled at its Silverton assembly plant in Pretoria.