BMW to unveil plans for SA

Uncertainty over industry policy and labour stability will not deter German car maker BMW from further investment in SA, says global group marketing head Ian Robertson.

In an interview at the Frankfurt Motor Show this week, Mr Robertson said BMW would make an announcement “very soon” about its next major investment at BMW SA’s Rosslyn vehicle assembly plant, near Pretoria. The plant, which has built a variety of cars for more than 40 years, today produces only the 3Series sedan.

Last year Rosslyn made 69,000 cars, of which about 50,000 were exported, mainly to the US. Mr Robertson said that the investment would also not be affected by continued discussions between SA and the US over the African Growth and Opportunity Act (Agoa), which allows goods made in subSaharan Africa to land in the US at preferential duty rates.

Mr Robertson’s confirmation of future investment is the second statement of intent by a South African-based motor company in three weeks.

Volkswagen SA (VWSA) MD Thomas Schaefer announced that his company would spend R4.5bn in the next two years to build new car ranges at its Uitenhage plant near Port Elizabeth where it currently builds Polo models. Mr Schaefer said it would decide “within weeks” what would replace them.

Rosslyn this year won an international award for producing the best BMW vehicles for sale in the US.

The plant’s current 3-Series model was launched in 2012 after a R2.2bn investment from Germany. Based on the usual model life cycle of seven years, this one would last until 2019 before it was replaced.

Mr Robertson, a former MD of BMW SA, said the German parent was busy planning the next Rosslyn product. “An announcement should not be far off.” The likelihood is that the new model will also be a 3-Series but this is not guaranteed.

BMW has expanded its product range in recent years and planners in Munich might decide another product is more suited to SA — in much the same way that, after years of producing the Golf, VWSA switched to Polo.

In 2013, BMW SA’s then-MD, Bodo Donauer, said plans to build another vehicle range at Rosslyn had been scuppered by persistent strikes in the sector.

There are fears of more strikes next year, when the current three-year agreement with the industry’s main union, the National Union of Metalworkers of SA, expires and has to be renegotiated.

However, Mr Robertson said that outcome would not affect the planned new investment.

Neither would government delays in announcing the result of an initial review of the Automotive Production and Development Programme (APDP), which runs from 2013 to 2020.

The Department of Trade

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and Industry is several months behind schedule in revealing its findings and although no major shifts are expected, the industry is anxious for hints at likely policy after 2020.

It is generally believed the APDP will continue after that date but in a modified form.

BMW SA is familiar with government inaction. After years of official dithering on APDP terms, Mr Donauer forced the government’s hand in 2009 by threatening to reduce investment in SA. Only after policy guarantees was the 3-Series investment confirmed.

If a new BMW model does arrive in 2019, it will fall under the current APDP. In theory, BMW could recoup up to 30% of any capital investment and enjoy production-based duty rebates.

MD of BMW SA Tim Abbott said yesterday: “Plant Rosslyn is very competitive within the global BMW production network … and is here to stay.”