Navara spearheads Nissan's African expansion plans
JOHANNESBURG – In April this year, Nissan announced that it would start building its Nissan Navara 1-ton pick-up from its Rosslyn plant in Pretoria, a significant moment for Nissan’s industrial expansion in Africa.
Rosslyn has been producing different models for 60 years, operating exclusively as a Nissan plant since the 1980s. Most recently, it has become a light commercial vehicle hub for the production of the Japanese automaker’s NP300 Hardbody and NP200 pick-ups, which are exported to 45 African markets.
In 2020, when the first of the Nissan Navara models start rolling off the production lines, we will have a major contender in the continental market. The vehicle is not only designed for Africa, but made in Africa by Africans. In the process we will have increased the competitiveness of the Rosslyn factory and created almost 1200 new jobs at the plant as well as across the supply chain for an investment by Nissan and its partners of almost $207 million (R3bn), but also further transformed the firm’s South African supply chain network by developing 13 new black-owned suppliers and setting localised content targets of 60 percent in the locally-built Navara.
The decision is the result of a very long and very deep relationship with the South African government on the need for a sustainable and competitive automotive industry. This has been demonstrated through a series of progressive automotive industrial development plans culminating in the ambitious South African Automotive Masterplan 2035. This not only sets targets, but provides investment security and planning certainty for the next 16 years. To secure this investment, Nissan had to ensure that the plant meets world-class standards by upskilling the employees.
Today the Rosslyn plant has been declared an anchor factory for the company’s Africa, Middle East and India region. Our vision is that one day there will be manufacturing hubs in other African countries - in addition to our two facilities in Egypt and Nigeria - because we believe that Africa is not just the last frontier for the automotive industry, but also for significant industrialisation and growth. The two go hand in hand; automotive manufacture is an incredible spur to a country’s industrialisation - and as a country industrialises, diversifying its economy, so its gross domestic product increases and its people become financially sustainable.
We have seen this with the so-called Asian Tigers and most recently with China. Africa is like China 20 years ago; a very low level of motorisation and a very low gross domestic product. What happened in China was an unequivocal determination to create growth so policies were put in place, just like with the Asian Tiger economies, and the growth followed suit very shortly afterwards.
Nissan’s stated objective is to work with African countries who want to partner with us to create a sustainable and competitive automotive industry. Africa is at the very beginning of this phase and we have partnered with countries which we believe have both the potential for rapid growth and the will to work with us in creating this highly specialised industry. We were the first movers in Nigeria and we have signed a memorandum of understanding (MOU) in Ghana. We are looking at other countries in Africa where there is similar potential, like Kenya and Ethiopia.
Ghana is a particularly interesting case study. When we began manufacturing in Nigeria in 2013, the country had a population of more than 150 million and a buoyant economy with incredible potential for growth. But then African economies stumbled, first with the drop in demand for oil and then the simultaneous slump in commodity prices - upon which most of the continent’s economies are based.
The past five years have been immensely tough. Angola and Nigeria, both predominantly oil economies, are achieving about 10 percent of the volumes they were seeing in 2014, but we kept the faith in Nigeria and continued with our commitment to the assembly plant. Next door in Ghana, we signed an MOU at the end of last year. The level of co-operation and commitment by the government of Ghana towards creating their own assembly plant has been phenomenal. We are working very hard with the Nigerian authorities to review the policy framework.
Policy is one aspect; another issue that determines the investment that is made is the size of the potential market. In Ghana’s case, the total industry volume (TIV), which measures overall market demand, is only 10000 vehicles a year of which we as the country’s top brand with our 32 percent market share would be looking to produce just more than 3000 vehicles a year initially. It’s very different to the Rosslyn scenario and South Africa’s TIV of more than half a million, with Nissan’s own projections to produce in excess of 50000 vehicles a year.
The level of investment will always be proportionate to the scale of the industry. The potential though, when we do develop this sector, is immense as South Africa has shown us. Down south, the sector generates around 7 percent of the annual GDP and accounts for a third of its exports with plans by government, labour and the National Association of Automobile Manufacturers of South Africa to grow domestic output to account for 1percent of global output by 2020, creating a globally competitive and transformed industry.
In turn, Nissan aims to double its presence in Africa, the Middle East and India by 2022 through its mid-term M.O.V.E. strategy. As Africa continues to grow, we will be in the right position to support these African countries, bring real mobility solutions to their people - and help transform their economies with them.
Whitfield is managing director of the Nissan Group of Africa, as well as vice-president of the Association of African Automotive Manufacturers and immediate past president of the National Association of Automobile Manufacturers of South Africa.