While the domestic market is down, rapid increases in new vehicle export programmes have given the industry lots to crow about.
Although new car, light and medium commercial vehicle sales remain under pressure due to increased interest rates, petrol hikes and the slowing of the economy globally, according to the National Association of Automobile Manufacturers Association of South Africa (Naamsa), significant participation by firms in exports stood to offset the decline in local demand for cars.
“The rapid increases in new vehicle exports will contribute to an increase in export revenue from R29bn (2007) to about R45bn (2008),” said Naamsa.
This year’s total component and vehicle export revenue is estimated to reach R95bn compared to about R92bn in import revenue, said the association.
VOLKSWAGEN SA
Volkswagen South Africa (VWSA) and Eberspächer’s five-year, R12bn export contract for environmentally-friendly components to the international Volkswagen group has been described as a ‘coup’ for South Africa said VWSA Managing Director David Powels.
Diesel particulate filters (DPFs) will be produced at a new VW facility at Neave Township and at Eberspächer’s Deal Party plant in Port Elizabeth. Powels said joint investment in tooling and equipment would total R55m.
“The investment in the national supplier base will be about R26m, with 80% of these suppliers based in Mandela Bay.”
Powels said the contract was “one of the biggest export contracts for a single part ever awarded to the company”.
Naamsa Executive Director Roger Picot said the contract represented a ‘quantum leap’ in the local manufacture and export of DPFs. He said exports of these components from SA last year numbered just under 300 000 units, with an estimated value of R300m.
Another major boost is the joint R1bn investment plan between VWSA and national and international component manufacturers to set up operations in Uitenhage.
Powels said the investment and resultant 1000 jobs that would be created were the result of VWSA challenging component suppliers to “significantly improve processes and productivity levels to survive and grow”.
Five suppliers are already establishing manufacturing facilities at the NMB Logistics Park adjacent to VWSA’s plant. The total number of investors at the park will increase to nine by March next year. The suppliers are interior plastic components manufacturer Faurecia Interior Systems, metal pressing parts manufacturer Bloxwich Industries, side mirrors and cables manufacturer Flextech, bumper systems manufacturer Rehau Polymer and headliner and door panels manufacturer Grupo Antolin. VWSA has also unveiled a new long-term R1.5bn investment strategy that will increase daily production capacity from 600 to 800.
GENERAL MOTORS
“Since GM’s return to South Africa at the beginning of 2004, we have invested R2.6bn in GMSA’s operations for facility and equipment upgrades, new model introductions, a new P & A warehouse and for the export of the HUMMER H3,” said Communications Manager Denise van Huyssteen.
“This year we invested R140m in our new Vehicle Conversion and Distribution Centre at Aloes. It was designed with capacity for about 8 500 units. The VCDC provides a ‘one stop’ service for all activities that we perform on vehicles after they have left the local assembly line or, in the case of imports, been received from the port,” she said.
“The new facility started operating in June. We are already realising significant benefits in areas such as reduced lead times from vehicle receipt at the port to readiness for final delivery, reduced repair turnaround times and cost, reduced vehicle movements prior to delivery to the end customer, improved storage and maintenance quality, reduced damage to vehicles while in storage, improved vehicle control and security and better finished vehicle inventory management”.
FORD MOTOR COMPANY
Ford Motor Company of Southern Africa’s (FMCSA) planned R1.5bn investment in expanding operations for the production of a next-generation compact pickup truck and Puma diesel engine will have a direct impact on the Eastern Cape.
The investment, beginning in 2009, will be split between its assembly plant in Silverton, Pretoria and engine facility in Struandale, Port Elizabeth. The spend at the Struandale plant will be R640m.
Production of the new diesel engine is scheduled to begin in 2010, followed by production of the new pickup in 2011.
“The Struandale engine plant will increase annual production for its next-generation, turbo-charged common-rail Puma diesel engine and components to about 180 000 units, with the majority being exported,” said FMCSA President and CEO Hal Feder.
MERCEDES-BENZ
A new R200m vehicle manufacturing facility that will produce previously imported Triton bakkie models was opened recently at the Mercedes-Benz South Africa plant in East London for its subsidiary Mitsubishi Motors SA.
It will produce two models – the Mitsubishi Triton double-cab, previously manufactured in Thailand, and, an all-new model, the club-cab.
Parts of the new manufacturing line have been designed and manufactured by local companies and numerous small and medium enterprises were employed for infrastructure changes and upgrades.
Mercedes-Benz SA CEO Dr Hansgeorg Niefer said the new Tritons would be exported throughout southern Africa.
