SA vehicle exports make inroads
8 October 2003
The automotive sector is the largest manufacturer in South Africa and the country's biggest manufacturing exporter.
South Africa's automotive exports may be small in global terms - around 0.2% - but its presence in the world auto industry is significant for a developing economy.
The local industry has a world-beating cost ability on short or low-volume runs, competitive tooling costs. and a high degree of manufacturing flexibility. It also has good access to southern hemisphere and African markets, and offers right-hand drive (RHD) production facilities (SA is a right-hand driving country). VWSA produces all RHD Golfs for the UK, while BMW exports 70% of its output.
Major motor vehicle production operations are located around Port Elizabeth, Durban, East London and Pretoria. Companies include BMW, DaimlerChrysler, Delta Motor Corporation, Fiat, Ford Motor Corporation, Nissan, Toyota and Volkswagen.
Current exports of built-up cars
are destined primarily for Europe, the United States, the Far East, and Africa. The majority of commercial vehicles are exported to Southern African Development Community (SADC) countries, including Mozambique, Malawi, Zambia, Kenya and Zimbabwe.
According to the Motor Industry Development Programme strategy, local assemblers should aim at producing over 30 000 vehicle models by the middle of the decade, with some planning on higher figures of 60 000 to 80 000. The bulk of these will be produced for export. Local model ranges will be supplemented by imports to satisfy the needs of the local market.
Ford South Africa
Ford SA recently announced that it would start producing two new vehicles for export under a R1-billion investment programme, joining BMW, DaimlerChrysler, Volkswagen and Toyota as major exporters of vehicles from the country.
The value of
Ford's additional exports is expected to reach about R4-billion a year.
As a result of the new investment in the country, exports of components by the local company will also increase.
"Production parts to support an estimated 70 000 vehicles per annum will be exported from local suppliers to other international markets," the company said.
Ford's SA plant was the only industrial facility visited by US President George W Bush on his recent trip to the country.
Volkswagen South Africa
Volkswagen SA (VWSA) will in future focus its export programme on the Asia-Pacific region instead of the European market.
According to Business Day, VWSA expects to export 30 000 vehicles this year, bringing in R4-billion, with an additional R2-billion in component exports, but will withdraw from the European
market.
Despite a free-trade accord with the European Union (EU), local vehicle exports are still subject to a seven percent import tariff, which makes them less competitive than European-produced vehicles.
However, the similarity in freight costs from South Africa to Asia and from Europe to Asia mean that South African exports can compete with European exports in the Asian region, making it the sole Asia-Pacific supplier of Golf and Polo models.
In 2002, Volkswagen SA produced 30 000 Golf 4s for export to Europe and the United Kingdom. The company also exported components to the value of R1.6-billion last year.
Toyota South Africa
Toyota South Africa will start exporting its vehicles to Australia this year.
According to media reports, some 8 000 vehicles are expected to leave Durban for Australia, and this number is expected to increase
to substantial volumes from 2004.
Last year, Toyota Motor Corporation (TMC) reached an agreement with joint-venture partner Wesco Investments to boost the percentage of shares TMC holds in Toyota South Africa (TSA) from 35.7% to 74.9%.
TSA is a holding company of Toyota South Africa Motors, which handles production and distribution of Toyota vehicles in South Africa. Wesco currently owns 64.3% of TSA.
The company recently opened a new R168-million pressing plant for car side panels in Durban.
BMW South Africa
Over the past five years, BMW South Africa's Rosslyn plant near Pretoria has moved from operating as a Completely Knocked Down (CKD) production facility, assembling vehicles with limited customisation possibilities for the local market, to a world-class plant capable to producing customised 3 Series vehicles (4-door, right and left-hand
drive) for global export.
This evolution is largely due to BMW AG's R1-billion investment in the Rosslyn plant during the mid 1990s. The investment, used to upgrade the production facility into one of the most modern in the world, brought Rosslyn in line with other BMW plants worldwide.
In the five years since 1998, BMW SA has grown its overall production volume by 220%, while its production of cars for export has quadrupled.
Almost 80% of BMW's production of 55 555 units in 2002 were exported. Primary markets for South African manufactured BMWs are the United States (22 000 units or 47%) and Japan (13 000 units or 18%). Australia received 5 500 units or 8% of production, while the balance went to New Zealand, Hong Kong, Singapore and Taiwan.
Export production was up 18% in 2002, with over 43 000 units leaving South Africa compared with 36 750 in 2001.
SouthAfrica.info reporter
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