Planning by premium vehicle manufacturer BMW is far advanced for the manufacture of a new model at its Rosslyn plant near Pretoria, when the current 3-Series reaches the end of its lifecycle.
The current 3-Series was launched in 2012. Most cars have a lifecycle of about seven years before being replaced.
Ian Robertson, the member of the board of management of BMW responsible for sales and marketing, confirmed recently that a decision “should not be that far off”.
“We’re progressing to an announcement but are not quite ready for that yet. South Africa is an integral part of our worldwide network,” Robertson said at the Frankfurt Motor Show in Germany.
62 000 vehicles in total were exported to markets such as China, the US, South Korea, Australia, Japan and Canada from South Africa last year. This had been a record for the company, and a 17% jump over 2013 exports. The current 3 Series was launched in South Africa in 2012
“It has delivered on everything that we set out to achieve. Clearly there are some challenges but I’m sure they will be overcome. Rosslyn and its workforce will continue to prosper as a result.”
Robertson said the decision was not dependent on an announcement by the Trade and Industry Department on the review of the Automotive Production and Development Programme, the outcome of the negotiations about the renewal of the Africa Growth and Opportunity Act (Agoa) or labour stability issues in South Africa.
Robertson said it was unlikely that two models would be produced at the Rosslyn plant in the future.
Tim Abbott, the managing director of BMW Group South Africa, said the Rosslyn plant was very competitive within the global BMW production network, and had recently been awarded the platinum award for plant quality by JD Power & Associates for producing cars with the fewest defects of all the plants surveyed worldwide.
“Plant Rosslyn has an impressive 42 years history for BMW in South Africa and is here to stay,” he said.
Klaus Frohlich, the member of the board of management of BMW responsible for development, said whatever the next car was that was produced by BMW in South Africa would require significant investment.
Inside the BMW Rosslyn plant near Pretoria
There also remained some challenges to vehicle production in South Africa, especially in terms of labour unrest, added Robertson. Robertson was a previous MD of BMW Group SA, and also served five years as president of the National Association of Automobile Manufacturers of South Africa.
Stalled wage talks in 2013 led to an eight-week motor industry strike, which saw BMW Group SA tally 13 000 vehicles in lost production, as well as lose out on the opportunity to produce a second model at the Rosslyn plant.
Robertson said BMW had been forced to move production to other plants during past strike events in South Africa.
“It is important, as we move forward, that surety of supply is part of the discussion. A customer does not really care where the product comes from. If a customer wants a 3 Series, he wants a 3 Series. He is not interested in a problem at one of our factories. We have to make that clear in our thinking.”
Robertson noted, however, that a decision on future production in South Africa was not linked to fresh automotive industry wage negotiations, scheduled for 2016,
Robertson said that the benefits of Agoa were viewed as “the cherry on the top” because it was not a good business case if production and investment decisions were dependent on them.
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There was still an advantage to BMW’s South African operations over its German operations because of Agoa, adding they had to pay tax to export cars into the US from Europe. The Rosslyn plant produced about 69 000 3-Series last year, with about 40 000 of them exported to the US. 62 000 vehicles in total were exported to markets such as China, the US, South Korea, Australia, Japan and Canada. This had been a record for the company, and a 17% jump over 2013 exports. The current 3 Series was launched in South Africa in 2012.