Johannesburg - Ford is considering expanding its manufacturing footprint to other countries in sub-Saharan Africa, such as Nigeria, but only after it has maximised the capacity of its manufacturing plant in Silverton in Pretoria.
Jeff Nemeth, the president and chief executive of Ford Motor Company of Southern Africa, confirmed yesterday that the company was working towards expanding its distribution into the region, where there were 16 countries it did not operate in and it would like to develop a footprint there.
He said it was looking at Nigeria as a possible manufacturing location but stressed that it was the first country to produce an aggressive local manufacturing plan and Ford needed to see how many countries would follow its lead.
Nemeth said Angola had implemented a duty level around local production similar to that introduced in Nigeria.
“I don’t think Nigeria is the first shoe and we are going to wait and see where the others drop before we make any meaningful decisions about where we are going to lay down manufacturing capacity.”
He stressed that Ford could serve its customers with the manufacturing capacity it had and was interested in maximising the capacity of its Silverton plant before it started investing in capacity in another country.
“We’re going to work on that first but it could give us an opportunity to bring new products onto the continent at an affordable level. We need to continue to study it.”
Stephen Odell, the executive vice-president for Europe, the Middle East and Africa, said last month that Ford had created a stand-alone Middle East and Africa business at the start of this year as this was a growth area in terms of population and wealth creation.
Ford wanted to be part of this growth and its South African manufacturing operations, its only plant in the region, was an anchor for this new business unit, he said.
Ford’s comments about Nigeria follow the Renault-Nissan alliance and west African conglomerate Stallion Group announcing last year their intention to jointly launch vehicle assembly in Nigeria, indicating there was potential to develop the plant into a major manufacturing hub for Nissan in Africa.
Nemeth played down a potential threat to South Africa by other countries on the continent as automotive manufacturing bases, stressing the significant advantage South Africa still had on the continent in infrastructure and human capital.
“South Africa is going to continue to be a major economy on the continent, especially in manufacturing. It’s going to take decades for automotive industries to develop in a place where they don’t currently exist.
“Look at China’s economy and the strength, growth and the human resources it has and how long that has taken to grow. It’s been 20 years from the time China started to where it is today. And they are a so much more robust economy from a starting point than a lot of countries in Africa.
“There is plenty of potential on the continent. There are 1.3 billion people in our region and plenty of opportunity. We’re not going to be building 1 billion cars in South Africa. As people become available to purchase vehicles, then we will put plants where the customers are,” he said.
Nemeth said this would be a great opportunity for automotive suppliers in South Africa to participate in manufacturing in other countries in the region, either as an exporter or as a transplanted South African supplier.