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Johannesburg - In what is probably one of the biggest investments in the local automotive industry, BMW Group on Monday announced that it will invest a total of R6bn at its Rosslyn Plant in Pretoria in the coming years.
Affirming its long-term commitment to South Africa, the investment will enable Plant Rosslyn to produce the next generation BMW X3, which will be sold locally and exported to various countries.
Speaking to finweek Tim Abbott, Managing Director of BMW Group South Africa says that production of the next generation BMW X3, which will replace local production of the BMW3 Series sedan, will allow for greater support of local suppliers through increased localisation of components, expected to be greater than that of the BMW 3 Series produced at Rosslyn.
“It is very much about local content with local companies, trying to support local BBBEE companies and start-up companies to supply into the plant. We are here to support South Africa and the people of South Africa and we want to do this in a local way.”
“28% of BMW production to date is X models,” says Abbott. We only produce the X models at Spartanburg in the USA and take it as a great compliment that the BMW X3 will be built for the first time outside of America, says Abbot.
“The reason we have been awarded the production of the X3 is because of the quality of the cars we build, the consistency of the workforce and the competitive situation with APDP.
“In Africa, we have more opportunity with the BMW X3 than we would have with the BMW 3 Series sedan, even though the 3 Series is still the core model for BMW and will continue to be so. But in trying to match demand with production, we believe that longer term, the X-model, especially the BMW X3 will have a huge demand in South Africa and neighbouring countries.
“Rosslyn is a two-shift plant. Because of world demand for the 3 Series we went to a three-shift which expires next year in 2016. We have the capacity here to build the same number of X3’s, if not more than the 3 Series but that will depend on take-up from markets around the world.
Exports of the X3 are expected to be a huge success. “There will be opportunities to export the car to other countries in Africa which we currently don’t do with the 3 Series,” says Abbott.
A big step last week in the partnership between government and business was Minister Rob Davies announcing the continuation of the Automotive Production and Development Programme (APDP) to 2020 that also encourages more investment into South Africa with smaller production companies.
“It’s good news for us because it means more suppliers that we can share with going forward. Minister Davies has made it clear that in his opinion the APDP will go past 2020.
“He sees automotive as being one of the key industries in South Africa. We will work with him past 2020 but I am sure the framework will still be competitive going forward. That’s why we have invested R6bn here in South Africa; R3bn in plant restructuring and R3bn for launch costs, suppliers and training.”
Preparation of the plant for the production of the X3 will commence next year while simultaneously continuing production of the 3 Series for the current lifecycle. Production of the BMW 3 Series Sedan will be allocated to other plants in the BMW Group production network.
