File Image: IOL
File Image: IOL

BMW's X3 initiative safeguards city jobs

By Roy Cokayne Time of article published May 7, 2018

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JOHANNESBURG - BMW South Africa has dispatched the first domestically produced BMW X3 SUVs for export markets in Europe.

The German vehicle manufacturer confirmed on Friday more than 100 BMW X3s were transported on 27 railway carriages to the port of Durban.

This follows a R6.1 billion investment by BMW in its production plant in Rosslyn in Pretoria, which was announced in November 2015, to upgrade and expand the capacity of the plant for the production of the BMW X3.

This investment, which is one of the biggest single investments ever by South Africa’s automotive industry, also reaffirmed BMW’s long-term commitment to South Africa.

The plant previously produced the BMW3-Series for both the domestic and various export markets, with the plant in February this year building the last of the 1191604 BMW 3-Series cars it has built over five model generation in the past 35 years.

Tim Abbott, the chief executive of BMW Group South Africa and sub-Saharan Africa, said the dispatch of the first BMW X3 models for export marked a significant day for the group as its Rosslyn plant continued to ramp up production of the new model.

“It’s the result of a R6.1bn investment into the country and the culmination of three years of hard work and planning.

“It’s really exciting to know that BMW Group Plant Rosslyn has joined the enormous success story of BMW’s X models globally and goes to show the power of combining good industrial policy and foreign investment,” he said.

BMW’s X models now make up more than 30percent of BMW’s global volume.

Oliver Zipse, the management board member at BMW responsible for production and chairperson of BMW South Africa, said earlier this year the decision by BMW to shift production at the Rosslyn plant from the 3-Series to the X3 was extremely positive, because it had safeguarded the existence of the plant.

“The X3 is a much better product for South Africa than a limousine (sedan) and we think our market share will increase," he said.

“The X3 safeguards the existence of Plant Rosslyn, because it is in a growing market segment.

"The limousine is not a growing market segment worldwide.

“We saw it (the decision) extremely positively, because we have additional production capacity in a growing market segment where we did not have sufficient capacity,” he said.

However, Zipse also cautioned the South African government about proposed changes to its automotive policy that would endanger the growth and future existence of the domestic industry.

BMW was particularly concerned about the possible scrapping of export credits and high local content targets in the new programme that from 2020 will replace the existing Automotive Production and Development Programme (APDP).

The export credit incentive in the APDP allows locally based original equipment manufacturers to use the credits earned from the export of locally manufactured vehicles to offset the duties imposed on the importation of other fully built-up models.

Abbott said last week that the upgrading of the Rosslyn plant for X3 production represented the largest infrastructure upgrade in the plant’s history.

He said the culmination of these efforts was the loading on to a train of the first South African-built BMW X3s for the group’s European customers.

BMW’s vehicle distribution centre in Rosslyn can accommodate up to three train dispatches a week, with each train capable of carrying up to 160 cars.

A maximum capacity of 71000 units a year was initially planned for BMW X3 production at the state of the art Rosslyn plant.

However, BMW made a further R160 million investment to increase the line speed at the plant, which increased the maximum capacity of the plant by almost 10 percent to 76000 units a year, after underestimating demand for the new BMW X3.

Abbott said the group was confident that the plant would produce record volumes next year to add to the growing success of BMW’s X models around the world.


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