DON ROBERTSON

10 April 2005

AN investment of R600-million by the troubled General Motors group for the assembly of Hummer sports utility vehicles (SUVs), while small, has been welcomed by analysts.

It is reported that three international rating agencies are expected to reduce General Motors’ debt and bonds to "junk" status as the group falls ever deeper into the hole.

However, this is not expected to affect the latest export contract or the supply of vehicles to South Africa.

Robert Socia, president and managing director of General Motors SA (GMSA), says the vehicle export programme will have many benefits for the Port Elizabeth community.

"We estimate that around 450 jobs will be created and there will be added benefits generated as a result of GM’s investment of over R600-million into product development and production."

Last year, GM spent R300-million on equipment and an additional R480-million on the new Isuzu light commercial vehicle.

The Hummer H3 mid-sized 4x4 sports SUV, which will be assembled by GMSA at its Struandale plant in Port Elizabeth from the fourth quarter of next year, is the third civilian model to be produced.

The vehicle was initially developed for international military forces.

Production will reach about 10000 a year, worth R18-billion over a six-year period.

The Opel Astra will no longer be produced locally, says Socia. It will be imported from next month and the new SUV will be assembled on this line.

While the bulk of production will be exported, it is expected that about 300 units a year will be sold in South Africa.

GMSA will be the only production facility outside the US to produce the Hummer.

The vehicles will eventually be produced in left- and right-hand drives in petrol and diesel and will be exported to Europe, the Middle East, Asia, the UK, New Zealand and Australia.