Ford has joined the list of global manufacturers to invest in export capacity in South Africa – the first US-based company to do so, writes Dave Cumming. Deborah Coleman, CEO and group managing director of the local Ford operation, has announced a 1 billion rand (£86.5 million; $US135.6 million) programme, which will see the company exporting a commercial vehicle in the third quarter of next year and a passenger vehicle in the first quarter of 2005.
Target volumes are 2,700 and 30,000 vehicles respectively but no details of what models will be involved are being revealed at this stage. However, there is strong internal speculation that the passenger car will be a new Ford “world model” which is still under wraps.
The company is also not identifying destination markets.
Coleman says the move will also provide the company’s component suppliers with a considerable boost. They will export production parts for 70,000 vehicles a year and will also supply Ford’s global manufacturing network with service parts.
Ford will now join DaimlerChrysler, BMW, Volkswagen and Toyota in using South Africa as an international manufacturing base. Its choice of the South African operation over competition from Ford plants worldwide is seen as recognition of the plant’s ability to meet international quality standards.
Coleman believes the company’s proven track record in supplying catalytic converters (2.2 million a year) and the 1.3 and 1.6-litre RoCam engines (240,000 a year) within quality, cost and delivery targets counted strongly in its favour. It has received certification in terms of a variety of international quality standards, including the motor industry-specific TS16949 for its assembly plant at Silverton (Pretoria), which will produce the new vehicles.
The increased volumes associated with the project are expected to provide economies of scale for local content, productivity improvement, state of the art equipment and the associated technology transfer.