JOHANNESBURG - BMW Group South Africa has invested a further R160 million in its manufacturing facility in Rosslyn in Pretoria to enhance production line speed and improve the flexibility of the plant.
It follows the announcement by BMW SA in November 2015 that it would investing R6 billion in South Africa to prepare the plant for the production from the first half of next year of the new generation BMW X3 for the domestic and export markets.
The investment will increase the maximum annual production capacity of the Rosslyn plant by almost 10 percent from 71 000 units to 76 000 units.
Tim Abbott, the chief executive of BMW Group South Africa, said yesterday (mon) the increased production capacity did not represent the volumes that would be produced in the plant but would give them the flexibility to produce at that level.
“The good news for me is that when we started this plan we were talking about 50 000 units and here we have a number with a ‘7’ in it. BMW Group South Africa is now becoming part of the global BMW X-model success story,” he said.
BMW X-models, part of the brand’s Sports Activity Vehicle (SAV) range, accounted for more than 30 percent of total global sales for the brand last year, with the BMW X3 accounting for more than 24 percent of the global BMW X-model range.
Abbott said the production capacity of BMW’s plant in Spartanburg in the US was still up for discussion because it was also looking at producing the X7, X5 and X6. “The demand is outstripping BMW’s original thinking and that is why Rosslyn has come on board to make sure we are the balancing act on X3 and why we need flexibility here.
“We are becoming much more relevant in terms of X3 going forward than Spartanburg,” he said.
The BMW X3 will only be produced at the Spartanburg plant for the US and Canadian markets, in China for its domestic market and at the Rosslyn plant for the South African and European markets.
Abbott said the additional investment meant the Rosslyn plant would in the future have the potential to produce the highest volume ever in its 44-year history. Stefan Huelsenberg, the director of the Rosslyn plant, said the investment in the plant had resulted in the biggest infrastructural change in the plant since 1973.
Huelsenberg said there had been a huge amount of construction work since the investment was announced with the plant site expanded by 30 000m2 for the new state-of-the-art 26 000m2 body shop, which was 50 percent larger than the previous body shop.
He said the number of robots in the plant had almost doubled to 300; a combined body store built where they could store painted and unpainted bodies and increase the plant’s production flexibility; and new automated and more environmentally friendly technology introduced in the paint shop.
Abbott said the US market was an important export market for BMW 3-Series but the fact the X3 would not be exported to this market had nothing to do with the Africa Growth and Opportunity Act (Agoa).
“It’s purely because we have a plant in Spartanburg that will supply X-models to the home market and we will supply into Europe. That is a fundamental change but that works for us as well because South Africa has a free trade agreement with Europe,” he said.
Abbott said BMW SA would achieve the 60 percent local content requirement of European and South African components in terms of that agreement. “Components supplied out of South Africa for the X3 will be at least 20 percent higher than it was for the 3-Series," he said.
- BUSINESS REPORT