The government’s efforts to maintain positive investment perceptions went into overdrive yesterday as Trade and Industry Minister Rob Davies met with BMW South Africa to iron out impressions that the company was cutting back on expansion plans.
This came as the Renault-Nissan alliance and west African conglomerate Stallion Group announced yesterday that they intended to jointly launch vehicle assembly in Nigeria, indicating there was potential to develop the plant into a major manufacturing hub for Nissan in Africa.
Nissan South Africa managing director Mike Whitfield, who is responsible for the sub-Saharan Africa region including South Africa and Nigeria, stressed this did not pose any threat to the South African motor industry and was an opportunity for co-operation and complementation. “I see it being very beneficial to our South African operation and for the total growth of the industry in Nigeria. Overall this is a great step forward,” Whitfield said.
Davies was scheduled to have an in-depth meeting last night with BMW SA. “I am seeing them to talk to them this afternoon. I received a letter from BMW in which they clarified that their concerns were not correctly reported,” he said.
Azar Jammine, a director and chief economist at Econometrix, said Nissan’s plan was “a sign of the times” and in retrospect might be seen as the seminal moment in the shift in power in Africa away from South Africa to Nigeria.
“I also find it fascinating and not coincidental this announcement comes so soon after the motor industry strikes and BMW’s announcement,” Jammine said. “There could be a strong message in there.”
This is a reference to BMW SA’s confirmation last week that it had been taken off the bidding table for the production of a new and second model at its Rosslyn plant in Pretoria because of the strike in the component manufacturing sector.
“We are talking for the first time of Nigeria becoming a major competitor [to South Africa] on the manufacturing side, which has not been the case hitherto and should be a massive wake-up call to the government and unions.”
It could also pave the way for other companies, not just in the motor industry, to follow the same example, Jammine said.
Whitfield said there was a need to be realistic, adding that South Africa’s motor industry started 40 years ago.
He said the Nigerian motor industry would be complementary to South Africa’s because Nissan SA would supply semi-knocked down vehicle kits to Nigeria and components would be supplied from South Africa.
The trade ministers of Nigeria and South Africa were working together to develop an automotive pact while the Nigerian government was also developing a policy against grey-vehicle imports.
“South Africa could capitalise on this because Nigeria has a market of 160 million people,” he added.
Nissan SA currently exports its bakkie to Nigeria.
Nissan said its announcement was made in expectation of Nigeria’s final approval of a new automotive industry policy, which would result in Nissan becoming the first major international manufacturer to launch vehicle assembly there.
Carlos Ghosn, the president and chief executive of Nissan, said it welcomed the proactive measures being taken by Nigeria to encourage inward investment and job creation driven by vehicle manufacturing. “Together with our local partner, Nissan is preparing to make Nigeria a significant manufacturing hub in Africa,” he said.