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In late 2015, BMW SA announced an investment of R6bn at its Rosslyn plant in Pretoria to enable the plant to produce the next generation BMW X3.
But global demand for the X3 resulted in the 2019 deadline being slashed by a year, with BMW’s mid-size SUV now set to come off the production line in 2018. It is one of the shortest turnarounds of any plant in the world, but nine months into the conversion, the upgrade at BMW’s Rosslyn plant is well on track.
The BMW X3 is higher, longer and wider than the BMW 3 Series that the Rosslyn plant has been building since 1975 (production of that model is moving to Mexico). It has entailed the biggest infrastructure change in the history of the plant in order to accommodate its production and capacity of 71 000 units each year.
An eight-week shutdown over the Christmas period to undergo upgrades and allow for X3 equipment to be built into the plant as well as continue with 3-Series production, involved 1 700 people and 1 414 400 manhours. Upgrades included demolitions equivalent to 25 average homes.
Much of the current R500m spend has gone towards a new 26 000m2 purpose-built bodyshop. Dominating this cavernous space are 288 Kuka robots, capable of building the X1 right through to the X7.
The new bodyshop will contain some of the most advanced technology and machines in the auto industry. It is here where body metal sheets like doors, boots and bonnets are assembled. And where new important skills are being honed, BMW is estimating an investment of around R25m in training by start-up.
Asked about the country’s downgrade to junk status and the impact on further investment, CEO BMW Group South Africa and sub-Saharan Africa, Tim Abbott said BMW SA won’t be “affected too much as the majority of our cars (80%) are produced for export.” And for the X3 that can easily be grown to 90%.
Nor is the investment strategy likely to be impacted as this is within the expected volatility, he told finweek.
But Abbott expects volumes to contract by approximately 10% due to rising car purchase costs. “People will take longer to make decisions and perhaps buy smaller vehicles.”
Of more concern to BMW is Automotive Production Development Programme (APDP) consistency. The current APDP plan, through which target compliant automakers access incentives, expires in 2020. A new automotive master plan that will run to 2035, seeks to address its drawbacks. Among new targets is increased localisation, set to jump to 60%. That though won’t pose a problem for the X3, which will boast 60% local content.
