General Motors South Africa (GMSA) will invest 500 million rand ($US81 million) in the production of Isuzu pick-up trucks, the company reportedly said on Tuesday.

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In a statement cited by Reuters, GMSA, a wholly owned GM subsidiary, said the funds would be used to improve production facilities and assembly capacity at its East London factories.


“In addition to the 500 million rand investment the company plans to spend 500 million rand per annum on procuring parts with local direct material suppliers,” it reportedly said.


Reuters noted that General Motors took over the Eastern Cape-based company in January when it bought the remaining 51% stake in Delta Motor Corporation, having bought a 49% stake in Delta in 1997, making its return to South Africa after leaving in 1986 in protest against apartheid.


“Given that General Motors Corporation returned fairly recently to the country, this sizeable investment in a single product line is a strong indication of confidence in the new product,” GMSA reportedly said.

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The news agency also noted that, in January, GMSA said it would invest around 1.5 billion rand over the next five years to develop products and exports and upgrade the company’s two East London factories.


According to Reuters, multinational auto makers such as BMW, DaimlerChrysler, Volkswagen and Toyota have consolidated their positions in South Africa to take advantage of the government’s motor industry development programme (MIDP), which aims to turn South Africa into a base for global exports of auto products. Under the scheme companies involved in export programmes can import vehicles and components at lower tariffs.


Components for medium and heavy vehicles, excluding tyres, are duty free, the report noted.