Capital FM (Nairobi)

30 January 2013

Kenya: GM Upgraded Assembly Plant Operational

Nairobi — Automotive assembler General Motors East Africa has launched its upgraded light, medium and heavy trucks and buses assembly plant, as the firm attempts to defend its market share and triple its production capacity.

The advanced plant, which was upgraded for about Sh100 million, was shut down in November last year for the upgrade and GM East Africa Managing Director Rita Kavashe said that the increased demand for buses and trucks in the Sub-Saharan Africa (SSA) necessitated the plant improvement.

"The upgrade was fuelled by the increasing demand of medium and heavy trucks and buses locally and in the larger SSA Market. And as GM, rather than miss out on sales because demand is outstripping supply, the company's settled for an upgrade," she said.

"We also wanted to modernise our facility to be in line with the changing technology hence improving efficiency by 30 percent and product quality," she added.

Kavashe was optimistic that the additional triple capacity, will act as an expansion catalyst in the region saying, "We are looking into exporting heavy trucks and light buses to SSA Market."

Over the last five years, the plant churned out 12,000 units of vehicles positioning GMEA as the leading assembling plant in the East Africa and with the upgrade we have the capacity to triple our production to enable us defend our position as the top automotive seller in EA.

Last year GM East Africa sold 3,421 units to take up the top slot as the market leader with a 27 percent market share.

"Going forward through increased efficiency, we anticipate satisfying more market demand as a result of reduced lead times. Our investment in this upgrade is in line with our strategy to continue prompt delivery of great products and superior service to our customers through our wide distribution network," Kavashe said.

The commercial vehicles segment has been supported by the increased activity in the construction, manufacturing and transport sectors while the saloon division has been hurt by the high cost of cars and the second hand market.

Kavashe revealed that GM's is keen in exporting vehicles in Sub Saharan Africa market saying, "These are the countries where we expect to see solid growth in vehicle demand taking place over the coming years and where we want to have strong position with great products and superior service."

Data from the Kenya Motor Industry Association indicates that Isuzu exported 215 units of trucks, buses and pick-ups out of 446 vehicle units in 2012, making GM East Africa a top exporter of assembled vehicles in East Africa with 48 percent.

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