Why General Motors is selling its majority ownership stake to Isuzu   | Infrastructure news

General Motors (GM) plans to sell its majority ownership stake in General Motors East Africa to its Japanese partner Isuzu Motors. This comes as the company has a broader goal to refocus its capital on more profitable markets.

This was announced by the group earlier this week.

A company spokesman said divesting into Kenya was “a natural next step for this business”.

Kenya currently has a very small vehicles market with only 30,000 vehicles sold a year.

Isuzu will acquire GM’s 57.7% stake in the unit in Kenya, which produces trucks under the Isuzu brand and sells imported Chevrolet-brand vehicles. More than 90% of the vehicles sold are Isuzu brand models.

According to Isuzu, the unit will focus on expanding sales and improving after-sales services.

GM is revamping and trimming its operations outside the United States and China, shrinking sales volume while pushing to improve return on invested capital and profitability.

According to Reuters, GM is in talks to sell its European operations to Peugeot SA, and has cut down operations in Russia, Australia, Indonesia and Thailand.

“We will continue to be ruthless in our decisions to not pursue lines of business or markets or opportunities that we don’t think can make a compelling return for us down the road, so more to come,” GM President Dan Ammann told investors at a conference in January.

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