Following in-depth negotiations with the South African government, the BMW Group will invest an additional R2.2bn in its export-focused Rosslyn plant in South Africa, the automaker said on Monday.
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“This investment will also trigger many positive spin-offs within our local supplier network,” BMW South Africa managing director Bodo Donauer told the South African Press Association at a media briefing in Johannesburg.
While the investment would result in Rosslyn’s maximum capacity increasing from 60,000 to 87,000 units a year, it would also secure BMW car production in South Africa for the foreseeable future.
Rosslyn currently produces the 3 series in both left- and right-hand drive versions. Almost 75% of output is exported to the USA, Japan, Taiwan, Singapore, Australia, New Zealand, Hong Kong, and sub-Sahara regions of Africa.
The South African vehicle market was facing its steepest decline in 15 years, Donauer noted.
“But the BMW Group has never shied away from making decisions for the future in difficult times,” he said.
He was convinced an announcement of this magnitude, during the worst known crisis the South African automotive industry had faced, sent a positive message to the company’s staff about the long-term sustainability of the Rosslyn plant.
Donauer said while the country’s automotive production and development programme (APDP) had not been finalised, BMW’s latest announcement had been made possible by the government’s willingness to remain flexible to the needs of the automotive industry.
“I am happy to report that we have received written commitment from the department of trade and industry confirming that our R2.2bn investment will be honoured under the APDP.”
Donauer was hopeful the decision would be the catalyst for a quick finalisation of the APDP decision process.
“This country has faced so many significant hardships in the past, and solved them all in a relatively pain-free way.”
He was “completely positive that the comparatively small issue of APDP finalisation would be easily overcome”.
BMW had experienced first-hand that the department was willing to support the entire automotive industry.
“However this willingness seems to be overshadowed by the many hurdles encountered in creating a programme that suits all industry players’ needs.”
However, Donauer believed it was possible for the manufacturers, suppliers and the government to conclude negotiations in a unified effort.
“In the process the automotive industry will be able to concentrate on its core business of maintaining and growing operations. This, in turn, will allow the industry to fully support government’s call to sustain and create high-quality jobs.”
BMW had retained its skilled workforce, despite the tough times in the industry. This would allow the company to ramp-up operations as and when market demand returned.
“For this reason, and to guard against any further downturns in the economy, we have implemented a training program for 1,100 members of our workforce.”
The program began in early September and would run for the next 18 months.
Trade and industry minister Rob Davies told the briefing BMW had made “a very wise decision” by investing in South Africa.
“This is a very significant announcement as it is taking place at a time when the automotive industry is undergoing severe strain.”
It showed the automaker’s confidence in local manufacturing and in the country. Work was proceeding on the APDP, he said.
“In due course we’ll be able to share some ideas with the industry. I also welcome the fact that there have been no retrenchments at BMW in SA.”
