Automobile manufacturers operating in South Africa are planning to more than double their worldwide exports by 2005, from 120 000 cars in 2002 to 250 000, with the US market taking an increasingly larger share, according to Ian Robertson, the head of BMW South Africa’s operations.
Speaking at the Business Day Nepad Conference in Cape Town, Robertson said the industry as a whole had invested over R3,5-billion into South Africa in 2002 as they continued to expand their operations. The rising investment was a vote of confidence in South Africa as a world-class manufacturing location, he added, despite its remoteness from the world’s major auto markets in the Northern Hemisphere.
BMW SA alone had so far invested R400-million in the country this year as part of the planned R2-billion expansion plan for its South African manufacturing facilities, he revealed.
More than 50% of total automobile exports from South Africa are now going to the US, followed by Japan as the second largest market.
“The US has become our most important market now,” Robertson told conference participants.
“AGOA (the US’s African Growth and Opportunity Act) has played a major role in this, giving South African-produced cars duty free access to the US market. This represents a $600 per car advantage over German-made cars and makes a significant difference.”
Robertson sounded a note of caution regarding such rapid export growth, saying he believed there was a ceiling on the total export market of some 250 00 to 300 000 units. However, the business of auto component supply was “almost limitless”, he said.
“Companies operating in this area have expanded rapidly and the growth potential is excellent.”
Despite the ceiling, he said BMW was optimistic about its future in South Africa in the face of concerns over productivity, proximity to market and the scourge of HIV/Aids. – I-Net Bridge