The South African arm of General Motors Corp. (GM) plans to cut about 700 jobs in the country after market conditions deteriorated further in the early part of this year, a spokeswoman said Monday.

"We anticipate terminating the services of temporary contract employees, extending the voluntary separation plan to all employees and, as a last resort, implementing forced retrenchments," said Denise van Huyssteen, communications manager at General Motors South Africa.

Van Huyssteen said the company would only proceed with forced job cuts after consulting with the industry union and other worker representatives.

New vehicle sales in March were almost 13% higher than in February, which had fewer trading days, but showed about a 30% drop on a year ago, figures released last week by the National Association of Automobile Manufacturers of South Africa showed.

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