The South African arm of General Motors Co. said Thursday it will build its new Chevrolet Spark model at its Struandale Plant in Port Elizabeth, on the country's southern coast.

The automaker has also reached an agreement with Isuzu Motors Ltd. (7202.TO) of Japan to expand exports of light commercial vehicles into sub-Saharan Africa, it said.

It valued exports contracts for the Spark and Isuzu vehicles together at more than 1.5 billion rand ($214.9 million) a year, but said opportunities to reach new markets were dependent on improvements in the competitiveness of South Africa's motor industry.

The Spark, described as an entry-level car that was launched in South Africa in August, is currently imported from Korea. GM South Africa said local production should begin in the first quarter of 2012 and it will assemble about 15,000 Sparks a year, with half of these destined for export markets.

Edgar Lourencon, president and managing director of GM Africa, said customers have placed more than 1,800 orders for Sparks in the first month of sales. "We therefore have no doubt that the new Spark is going to be a volume player here," he said.

The export contract with Isuzu, meanwhile, will provide opportunities beyond the current export markets of Mozambique, Zimbabwe, Zambia, Malawi and Mauritius, Lourencon said.

-By Robb M. Stewart, Dow Jones Newswires; +27 11 783 7848; robb.stewart@dowjones.com
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