JOHANNESBURG - BMW South Africa this week started production of the new BMW X3, the most “local” vehicle it has ever built, at its Rosslyn plant in Pretoria following the recent investment of R6.2billion in its operations in South Africa.

BMW could not disclose the specific local content level for the X3, but indicated that it was always seeking ways to increase local content at its plant.

The group stressed that increases in local content were only possible with the production of drive train components such as engines and gearboxes, which for reasons of efficiency were manufactured at specialist facilities elsewhere in the world.

Chief executive Tim Abbott said yesterday that the group had made significant progress on localising production of many components for the X3.

Abbott said BMW was also a leading participant in a proposed venture fund to develop more black-owned suppliers in the South African automotive supply chain.

He added that BMW’s contribution to ramping-up automotive exports, large-scale employment in dignified and safe jobs as well as other factors made up the content of discussions with the government, labour partners and component suppliers.

Abbott said the successful ramp-up of production of the X3 at the Rosslyn plant was a vote of confidence in the country and in BMW Group South Africa's associates.

“The allocation of production of such a crucial model to our plant is about as big a vote of confidence as it gets.

“The demand for the BMW X3 globally is powerful, and ramping up on time and to the right standards is vital to the model's success.

“I have full confidence in our associates and plant management at Rosslyn. This is the team that won the coveted JD Power Platinum award in 2015, showing that a South African plant can lead the world in terms of quality,” he said.

Last month, the group's German parent company cautioned the government about proposed changes to the country’s automotive policy, and specifically export credits and local content rules.

Oliver Zipse, the management board member at BMW responsible for production and chairperson of BMW South Africa, said if a decision was taken to remove the export credit incentive from the new programme that would replace the Automotive Production and Development Programme (APDP) in 2020, it would endanger the successor model to the BMW X3 at the group’s plant in Rosslyn in Pretoria.

Zipse said these changes might be very dangerous and referred to the different automotive industry framework in the Australian industry that resulted in it completely vanishing in less than five years.

The R6.2bn investment by BMW in South Africa, together with a subsequent additional investment of R160million, increased the maximum capacity of the Rosslyn plant to 76000 units a year.

- BUSINESS REPORT