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April 13, 2010

SOUTH AFRICA: Shared manufacturing concept looks to Asia for customers

A project aimed at giving new low-volume vehicle brands a soft landing in South Africa is gaining momentum as a business concept and will start touting for business among Asian car makers.

A project aimed at giving new low-volume vehicle brands a soft landing in South Africa is gaining momentum as a business concept and will start touting for business among Asian car makers.

Engineering News Online quoted Automotive Investment Holdings’ Corrie Kotze, a consultant to the East London project, who said that companies could qualify for the government’s proposed incentives under the new 2013 Automotive Production and Development Programme (APDP), which aims to help plants that produce 50,000 units a year or more.

“We are still negotiating with the Department of Trade and Industry on the issue of APDP benefits for the plant,” says Kotze.

The East London concept allows a number of vehicle manufacturers to share the same assembly facilities, such as a paint shop, a body shop, and trim and assembly lines.

The aim is to reduce the financial risk for start-up or lower-volume-selling brands, as it enables them to test the market without having to make major capital investments, while also reaping some rewards. The first target will be companies based in South Korea, China and India, said Kotze, adding that talks are due to start with companies based there in the middle of the year.

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