BMW South Africa, one of the largest foreign investors and employers, has remained buoyant about the country’s economic prospects in spite of ongoing energy and logistics challenges.
This comes as Transnet continues to battle to clear the backlog since November 2023 at the Port of Durban as a result of bad weather conditions, inadequate equipment and machinery.
The BMW Group last year invested R4.2 billion in the electrification of Plant Rosslyn in Pretoria where it will manufacture the next-generation plug-in hybrid BMW X3 for global export.
Speaking to BR yesterday, BMW South Africa’s manager for government and external affairs Mbasa Kepe said though they had not released any production figures for the fourth quarter, the congestion at the Port of Durban had been destructive to their operations.
Kepe said that they could not export cars out of the Port of Durban or bring parts into the plant at the height of the congestion, and they had to find other means to get these things such as flying them in.
“If we think that these things are going to affect production, they make plans. But of course, it increases the costs. I can't tell you the quantifier, what are the costs, but I mean, it’s a matter that we have discussed with Transnet as an automotive sector
“You build cars here, customers are in Europe, they expect their cars at a certain time, and if you don't deliver them on time, then we look at this as an unreliable destination to build these cars.
“The auto sector is looking at going to the Eastern Cape as well, because the congestion there is almost forcing these manufacturers who are here in Gauteng to go there, and it’s quite a long distance.
“I think what the industry today is asking for is for a shift back to rail because with trucks there's a lot of accidents, bottlenecks, and all those things.
“So we prefer the rail system, but the rail is not working. There are no bottlenecks there, but you’ve got electricity issues affecting the trains. So yeah, it's an interesting but difficult time. 2023 wasn't an easy one because of the congestion that was happening.”
The global luxury car manufacturer has pinned its hopes on South Africa’s automotive industry roadmap that it would demonstrate the government’s commitment to moving with speed towards electric vehicles.
In December, the Department of Trade, Industry and Competition released a White Paper that outlines a comprehensive electric vehicle (EV) roadmap for South Africa and the structure of a suite of policy interventions tailored to the automotive industry.
The primary goal of the White Paper is to set a course to transition the auto industry from primarily producing Internal Combustion Engine (ICE) vehicles to a dual platform that includes EVs in the production and consumption mix, alongside ICE vehicles in South Africa by 2035.
Kepe said it was clear that the White Paper will concentrate on production, but there were still issues of internal demand as customer support will come in later around 2027.
But the finance minister Enoch Godongwana will be making an announcement with regards to the EVs in his Budget speech next month.
“The government has indicated that it's inevitable that the world is moving in that direction and I think it's a consensus view with the industry and therefore they will support it,” he said.
“Some people are not chuffed with that, asking why it is too late. I suspect whatever they are announcing will be around the support because there are big conditions of production, which we are not objecting to.
“We're just not comfortable with the pace and the speed at which they make these decisions, because the world is not waiting for us. If we don't make the decisions, then they will look at the business case and they will say this doesn't work in South Africa, it works in China.
BUSINESS REPORT