Namibia’s car plant wor­ries SA

Gov­ern­ment and lo­cal mo­tor in­dus­try con­cerned the Walvis Bay op­er­a­tion could breach South­ern African Cus­toms Union rules

Business Day - - FRONT PAGE - David Fur­longer fur­[email protected]

SA wants Namibia to ex­plain a deal al­low­ing French car maker Peu­geot to run an as­sem­bly plant in the port city of Walvis Bay to build ve­hi­cles for the SA mar­ket, among oth­ers.

SA wants Namibia to ex­plain a deal al­low­ing French car­maker Peu­geot to run an as­sem­bly plant in the port city of Walvis Bay to build ve­hi­cles for the SA mar­ket, among oth­ers.

The SA gov­ern­ment and mo­tor firms want to be sure the deal does not breach South­ern African Cus­toms Union (Sacu) rules that would al­low the cars to be ex­ported duty-free to SA and other mem­bers Botswana, Le­sotho and Swazi­land.

Sacu im­port du­ties are based on the com­plex­ity and de­gree of lo­cal man­u­fac­ture. Im­ported car kits, in­di­vid­ual com­po­nents and ve­hi­cles com­pletely built in Sacu all carry dif­fer­ent du­ties.

The Walvis Bay plant, a joint ven­ture be­tween Peu­geot’s par­ent com­pany, Groupe PSA, and the Namib­ian Devel­op­ment Cor­po­ra­tion (NDC) was launched on Wed­nes­day.

It will start by build­ing the Peu­geot 3008, then in­tro­duce more prod­ucts ac­cord­ing to mar­ket de­mand. The in­ten­tion is even­tu­ally to add Opel cars. PSA bought the Opel brand from Gen­eral Mo­tors in 2017.

The fa­cil­ity will as­sem­ble im­ported car kits from France and Ger­many, a process known as semi knocked-down, or SKD. How­ever, SA of­fi­cials say they are in the dark about the terms of the deal.

They want to know what im­port du­ties the ve­hi­cles and their in­di­vid­ual com­po­nents at­tract when land­ing in Namibia, to be sure they meet Sacu free­trade rules.

“We are com­pletely in the dark. Namibia has told us noth­ing. The SA de­part­ment of trade & in­dus­try says it wants clar­ity. We have also asked SA cus­toms au­thor­i­ties to in­ves­ti­gate,” said Nico Ver­meulen, di­rec­tor of the Na­tional As­so­ci­a­tion of Au­to­mo­bile Man­u­fac­tur­ers of SA.

The Walvis Bay plant is part of a con­certed Peu­geot at­tempt to re­build its foot­print in Africa, where it was once a dom­i­nant force. PSA plans to open a Nige­rian SKD plant, with a medi­umterm an­nual ca­pac­ity of 10,000 units, early in 2019 and is in­vest­ing heav­ily in Mo­rocco.

PSA vice-pres­i­dent JeanChristophe Que­mard said the Walvis Bay move was part of the group’s strat­egy to grow an­nual sales in Africa and the Mid­dle East to 1-mil­lion by 2025. It sold 618,800 cars in 2017. More than two-thirds of those were to Iran. Sacu is a tiny con­trib­u­tor.

Que­mard hopes the Walvis Bay plant will reach an­nual pro­duc­tion of 5,000 by 2020. How­ever, in SA, the over­pow­er­ingly dom­i­nant re­gional mar­ket, Peu­geot has sold 458 ve­hi­cles in the past six months and Opel 1,666

— a to­tal of 2,124. Dou­ble that for a full year and it ap­proaches the 5,000 tar­get.

The SA sales are shared be­tween mul­ti­ple prod­ucts.

A clearer idea of the chal­lenge fac­ing the new plant is de­mand for the first ve­hi­cle, the 3008. It is Peu­geot’s most pop­u­lar SA prod­uct but only 176 were sold in six months. Opel’s topseller was the Corsa, with 546.

SA used to be a ma­jor mar­ket for both Peu­geot and Opel but sales have dropped in re­cent years. PSA gave up con­trol of its SA im­port com­pany, Peu­geotCitroen SA (PCSA), in 2017 ced­ing 51% to a Ja­panese-con­trolled re­tail group, Trust Auto.

PCSA MD Fran­cisco Gaie said: “We are ex­tremely proud of the in­vest­ment into Africa by PSA. Peu­geot has a long­stand­ing her­itage in Africa and this is a con­tin­u­a­tion of our com­mit­ment and ef­forts to reach new heights for the brand.”

De­spite its share of the com­pany name, the Citroen brand has with­drawn from the SA mar­ket. Opel is im­ported and dis­trib­uted in­de­pen­dently by the Wil­liams Hunt mo­tor re­tail group. Opel ve­hi­cles were built in SA un­til the end of 2017, when GM dis­in­vested. Lo­cal Peu­geot pro­duc­tion stopped in 1985.

As re­cently as two years ago, the French par­ent was talk­ing of re­turn­ing through a pro­posed multi­brand ve­hi­cle man­u­fac­tur­ing plant in East Lon­don. Korean and Chi­nese brands were po­ten­tial part­ners.

That would have al­lowed Peu­geot to share in­cen­tives from SA’s Au­to­mo­tive Pro­duc­tion and Devel­op­ment Pro­gramme, which re­wards man­u­fac­tur­ing­based in­vest­ment. SKD gets noth­ing from the pro­gramme.

It is not clear at this stage what in­cen­tives the Namib­ian gov­ern­ment of­fered PSA to op­er­ate in Walvis Bay.

How­ever, it is known that Namib­ian Pres­i­dent Hage Gein­gob has taken a per­sonal in­ter­est in mak­ing the deal hap­pen.

THE PLANT IS PART OF A PEU­GEOT AT­TEMPT TO RE­BUILD ITS FOOT­PRINT IN AFRICA, WHERE IT WAS ONCE A DOM­I­NANT FORCE

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.