American giant vehicle manufacturer General Motors has announced its exit from the region after over 40 years of operations.
General Motors East Africa Limited or GMEA or just GM, as it is popularly known, sold 57.7% of its stake to Isuzu, the Japanese’s vehicle and diesel engine manufacturer.
Other shareholders are Kenya Industrial and Commercial Development Corporation (ICDC) with 20% shares, Centum Investments (17.8%), and Itochu Corporation (4.5%). That makes Isuzu the majority shareholders with 57.7% shares.
Announcing the change of ownership, GMEA said that it will rebrand to Isuzu East Africa marking an end to the era of the Detroit-based GM.
Isuzu and GMEA did not disclose the total cost of the transaction which is at the moment subject to regulatory approval.
GMEA was founded in 1975 as a partnership between the Kenyan Government and General Motors.
The company started assembling vehicles in 1977 and has been the largest vehicle manufacturer of commercial vehicles in the East African region.
General Motors’ exit from the Kenyan market will call for a major realignment in the industry especially given that GMEA has been the leading player in the industry.
The deal will see the motor dealer rebrand in coming months.
This may also involve the loss of Chevrolet franchise but the company will still offer after sales and service support to Chevrolet customers.
This change of ownership will call for several realignments but the two automakers maintain that this will not impact Jobs.
Impact on jobs
This change of ownership will call for several realignments but the two automakers maintain that this will not impact Jobs.
The company’s managing director Rita Kavashe stated that the process of change of ownership would transition in coming months.
She also reiterated that this realignment would not affect jobs. Kavashe is set to continue serving as the managing director of Isuzu East Africa.
GM East Africa chairman Mario A. Spangenberg termed the sale as a natural next chapter of business especially given that a big percentage of its sales in Kenya are Isuzu products.
Spangenberg also serves as the president and managing director. That sounds like a lot of serious responsibilities. It’s like putting your head on a chopping board.
Operations and future plans
The company assembles and sells Isuzu autos such as buses, pickups, and trucks locally. Also, the giant auto manufacturer sells GM Chevrolet cars.
Spangenberg said that the change of ownership is a response to Isuzu’s request to be fully integrated into the company and “apply more focus on its brand.”
Isuzu affirmed that it hopes to expand its operations and increase sales in the region.
Important prerequisites will include organizing a training program for its Kenyan staff and technical support from its parent plant to further improve quality and production.
The company also hopes to engage in after sales business since it sees numerous opportunities in this.
GM East Africa has been the main player in the Kenyan auto market and has continued to increase its market share despite the decline in unit sales.
General Motors African operations
The exit from East Africa does not signal a complete exit from East Africa since GM has two other business units: South Africa GM and General Motors Egypt.
