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Beijing Automobile Intl Corp to invest $800 mil in S.African industrial zone

19 August 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – Chinese state-owned Beijing Automobile International Corporation (BAIC) has signed a deal to invest 11 billion rand ($823.30 million) in an industrial zone in South Africa’s Eastern Cape province, the operator of the zone said on Thursday.

The deal will see BAIC open an automotive manufacturing plant in the Coega Industrial Development Zone near South Africa’s Nelson Mandela Bay, the Coega Development Corporation said in a statement.

($1 = 13.3608 rand)

 

(Reporting by TJ Strydom; Editing by Alexandra Hudson)

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BMW looks to capitalize on the emerging African market

30 July 2016 Comments (0) Africa, Business, Featured

BMW Rosslyn plant, South Africa

How BMW is planning to become the leading luxury car brand in sub-Saharan Africa.

BMW has recently announced big plans for a major expansion into the African market. The German automotive powerhouse has long been considering a major push across the continent, and hopes its new strategy will see it become a household name in years to come.

South Africa is the stage from which BMW hopes to address its new audience of African consumers. The company has actually operated inside South Africa longer than it has in any other country outside of Germany. BMW acquired its historic Rosslyn plant from South African manufacturer Praetor Monteerders back in 1975. Since then, BMW has firmly established its prestigious brand inside South Africa, but seen little success across the rest of the continent, largely due to economic factors. For the most part, the Rosslyn plant has been used to service export-markets in Asia and the United States.

Rosslyn revived thanks to a major face-lift

The Rosslyn plant, famed for its outstanding quality, even by BMW standards, is about to receive a major face-lift. Production rates at Rosslyn have for a number of years been limited by one curious factor: room. Space has been at a premium for some time, thanks to the increasing technological demands of making modern cars. The firm has been cramming new technology into the same old space for over four decades, forcing it to compromise while restraining productivity. However, the shackles are about to be ripped off.

In late 2015 BMW finally acquired a long sought after plot of land adjacent from the factory. They simultaneously announced a 6 billion rand investment in the company’s South Africa division. A large part of this investment will be used to build a state of the art body-shop for producing the new BMW X3, which is critical to BMW’s forward strategy. The new body-shop will be one and a half times the size of the existing facility. This should make the Rosslyn facility twice as productive, providing BMW with the resources with which to wage its Africa expansion.

Strategic moves for BMW

BMW has realized it needs a “boots on the ground” approach to lead the charge across the continent. As a result, the company has granted full autonomy to its South Africa division, while using the rest of the 6 billion rand investment to train new staff and improve supplier support services. South Africa CEO Tim Abbott explained why BMW is so invested in the expansion: “The real growth for us in the future will come from Africa.”

While BMW is an international powerhouse in developed countries, those markets are saturated. Not just in the automotive sector, but in industries worldwide, shrewd organizations are realizing that Africa is the final frontier, the last chance to grow their brand in rapidly emerging markets. BMW does not intend to be left behind. The firm intends to start its courtship of Africa by targeting markets in Nigeria, Kenya, Ivory Coast, Togo, Ghana, Angola and Senegal.

BMW busy paving the way for a successful launch

BMW X3

BMW X3

Pivotal to their strategy is the upcoming BMW X3. The X3 is a sturdy and powerful four wheel drive SUV, which also boasts the style and finish synonymous with BMW. The German giant believes that these qualities will make the car highly attractive in the African market. Tim Abbott said that “with the X3, we believe we have a vehicle that resonates with these countries.”

Whilst the X3 isn’t going to be hitting African streets until 2019, Tim Abbott explained that BMW is busy paving the way for a successful launch: “Our plan over the next three or four years must be to create a structured sub-Saharan environment for BMW vehicles so that when the X3 is ready, so are the markets.”

Abbott explained that the firm intends to do this by working with African banks to create new vehicle financing options in target countries. Additionally a scheme is underway to re-sell used BMW’s from South Africa and elsewhere in the new African markets, while working with African dealerships to enhance sales and services to Western standards.

Ultimately, BMW is looking to secure its place in Africa’s conscious as the premier luxury car brand. Armed with major investment and an airtight strategy, it would seem unwise to bet against them.

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Kenya’s new car sales jump 12.86% in 2015:

18 January 2016 Comments (0) Africa, Business, Latest Updates from Reuters

NAIROBI (Reuters) – Kenya’s new car sales increased by 12.86 percent last year to 19,524 units, the Kenya Motor Industry Association said on Monday.

Rita Kavashe, who chairs the association, told Reuters in November that growth was driven by demand for light trucks used to distribute goods and carry construction materials.

 

(Reporting by Duncan Miriri; Editing by Hugh Lawson)

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Nigeria’s “bad bank” AMCON seeks bids for stake in Peugeot plant

12 January 2016 Comments (0) Africa, Business, Latest Updates from Reuters

LAGOS (Reuters) – Nigeria’s state-backed AMCON “bad bank” said on Tuesday it plans to sell its majority stake in Peugeot Automobile Nigeria (PAN) Limited, a local joint venture with the major French automaker, and is seeking bids from investors.

Peugeot Citroen is the technical partner to the Nigerian assembly plant, which has capacity to assemble 240 cars a day, PAN said on its website.

In a statement, the Asset Management Corporation of Nigeria (AMCON) said it owned 79.3 percent of PAN Nigeria Limited, having acquired the stake four years ago after purchasing the company’s debt and taking some as equity.

PAN Nigeria Limited was set up in 1972 as a joint venture between the Nigerian government and France’s Peugeot, with an annual production of 90,000 cars by the 1980s.

But operations nosedived and the company accumulated bad loans shortly after the government sold its stake via a privatisation to local core investors in 2006.

AMCON said PAN Nigeria had assets totalling 24.96 billion naira ($125.43 million) as of December 2014 and equity of 11.98 billion naira, and was seeking investors with experience in automobile manufacturing to buy the stake on offer.

Bids will close on Jan. 26 at 1600 GMT, it said.

President Muhammadu Buhari is keen to promote a “Made in Nigeria” industrial policy. In November, he met Peugeot’s executive vice president for Africa and the Middle-East, Jean-Christophe Quemard, to discuss the revival of local production.

The government under a National Automotive Industry Development Plan has ordered local car distributors to come up with plans for new assembly plants, along with threats of imposing prohibitive import duties.

U.S. carmaker Ford Motor Co’s partnership with a local car dealer has built its first model in Nigeria at a new assembly plant in November and said it will produce an initial 10 vehicles a day for the domestic market.

The auto market in Africa’s biggest economy has huge potential but only a small number of new vehicles are sold annually because the sector is dominated by imported used vehicles, and the absence of an industrial policy that would encourage suppliers to set up in Nigeria has stunted growth.

AMCON was set up to absorb bad loans from banks after a $4 billion bailout in 2009 rescued nine lenders from collapse. AMCON then bought bad loans at a discount in exchange for government-backed bonds and has since been selling off collaterals against those loans to pay bondholders.

 

(Reporting by Oludare Mayowa; Writing by Chijioke Ohuocha; Editing by Mark Heinrich)

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Mitsubishi Motors plans Nigerian assembly plant in next year

20 November 2015 Comments (0) Africa, Business, Latest Updates from Reuters

ABUJA (Reuters) – Mitsubishi Motors Corp expects to open an assembly plant in Nigeria in the next year, joining the growing list of carmakers setting up local assembly plants in the west African nation, the Japanese group’s regional head told Reuters.

“It’s still in negotiation – you can say in the third round out of 10,” Anand Singh, the regional head in west Africa, said. “We have identified the land. Now we are waiting for some clearances from customs, finance ministry … so that’s the status.”

Analysts say the auto market in Africa’s biggest economy has huge potential.

Only a small number of new vehicles are sold annually as the market has hitherto been dominated by secondhand imports.

However, along with the threat of imposing prohibitive import duties the government has been pushing for the development of local production under a National Automotive Industry Development Plan, with the industry ministry having ordered local car distributors last year to come up with plans for new assembly plants.

It was then up to the local companies to partner with a foreign car producer, Singh told Reuters.

Earlier this week Ford Motor Co announced the opening of its new Nigerian plant, its first in Africa outside South Africa, through dealer Coscharis Motors Ltd.

Germany’s Volkswagen AG also resumed local assembly operations in July, with local partner Stallion Group, after a 20-year hiatus, while Honda announced in July the start of local production for its Accord car.

President Muhammadu Buhari, who is keen to promote a “Made in Nigeria” industrial policy, also met this week with French carmaker Peugeot’s executive vice president for Africa and the Middle-East, Jean-Christophe Quemard, to discuss the revival of local production, Buhari’s office said.

 

(Reporting by Julia Payne; Editing by Greg Mahlich. Reuters)

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BMW to invest $417 mil to make X3 model in South Africa plant

17 November 2015 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – BMW’s South African unit plans to invest 6 billion rand ($418 million) at its plant in the capital Pretoria where the German carmaker would manufacture its new X3 model for export and local sale.

The X3 is one of the most successful model ranges for BMW, the world’s biggest luxury carmaker, representing 28 percent of total global sales, the local unit of the global car maker said.

BMW said 2015 production at its Rosslyn plant in Pretoria is expected to reach 70,000 units.

“The production of the next generation BMW X3 at Plant Rosslyn will replace the BMW 3 Series Sedan, which will now be allocated to other plants within the global BMW production network,” the car maker’s local said in a statement.

BMW’s South Carolina plant in Spartanburg will continue producing the carmaker’s new version of the X3 and the X7.

 

(Reporting by Zandi Shabalala; Editing by James Macharia, Reuters)

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