Nissan South Africa has been awarded a one billion rand ($US148 million) export contract by its Japanese parent in a move that will see it expanding light truck sales beyond Africa.
Reuters said the deal to export Hardbody single cab pickups to Europe, Singapore, Australia and New Zealand marks another milestone for the country’s motor industry, which is one of its largest industrial employers.
Nissan South Africa managing director Julio Panama reportedly said in a news conference that the contract formed part of Nissan’s three-year plan to grow profitably by utilising its resources worldwide.
“It is important to us, for our suppliers and for South Africa,” Panama said, according to Reuters, adding: “It places us among the global players in the very competitive automotive market and is evidence of our parent company’s confidence in our ability to deliver quality vehicles.”
Reuters said that Nissan South Africa, wholly owned by Nissan, joins European and Japanese rivals such as DaimlerChrysler’s Mercedes-Benz division, Volkswagen, BMW and Toyota, which have also awarded export contracts to their South African subsidiaries.
Mercedes builds all of its right-hand drive C-class sedans in South Africa while BMW and VW ship 3-series sedans and Golf hatchbacks to right-hand drive markets including the UK. Toyota South Africa ships Corolla sedans to Australia whose Toyota operation in turn ships locally-built Camrys the other way.
Reuters said these companies are taking advantage of the government’s motor industry development plan aimed at turning South Africa into a global market for exports of high quality automotive products.
The plan was introduced in 1995 and has been extended to 2012 to maintain the momentum of exports. Automotive exports make up 12.8% of South Africa’s total exports, and the sector – the third largest economic division – contributed 6.3% of the country’s gross domestic product in 2002, the report said.
According to Reuters, South African trade and industry Minister Alec Erwin said the Nissan contract, initially for a two-year period with an option of an extension for three years, had been won at a time when the global automotive sector was experiencing overcapacity.
“I am quite confident that this is the beginning of more good things to come, given that they (Japan) have given you some tough markets to sell,” Erwin reportedly said.
Reuters said the contract will see Nissan South Africa spending $38 million on upgrading the local plant and generate much needed jobs in the supplier market.
The export programme will begin in October 2005 and the vehicles will have about 65% local content. Initially, 4,600 left- and right-hand drive trucks will be exported, the report said.
Reuters noted that Nissan South Africa has a 55% share of the African truck market, and Panama said the latest contract provided a base from which to launch an aggressive export programme.