BRUSSELS - General Motors will return to South Africa after 11 years' absence. The company will buy a 49 percent stake in Delta Motor Corp., which GM sold to its management when it withdrew from the country in 1986.
The political and economic transformation of South Africa has impressed GM, said Lou Hughes, president of GM International Operations. In a statement he said, 'With vehicle sales expected to resume their upward trend - and GM in the middle of the largest global capacity expansion in its history - it is now the right time for GM to re-enter the South African market.'
The 1986 management buy-out team included Keith Butler-Wheelhouse, a former chairman of Saab who sits on Delta's board of directors.
Delta employs 4,500 workers. It has built cars under license for Isuzu and GM, including the Astra and Corsa. GM declined to say whether additional models would be assembled at Delta's Johannesburg plant. The plant built 49,000 units in 1996.
The two partners have agreed to develop programs to boost Delta's competitiveness. GM said these could include expanding Delta's component exports. The company already exports some components, including catalytic converters, and sells its cars to other African countries.
In the first 11 months of 1997 Delta had a 15.5 percent share of the South African new-car market.
GM will begin selling several Cadillac and Chevrolet models in South Africa through Delta dealers, beginning in early 1998.
GM started operations in South Africa in 1926.