BMW sends exports via two ports
BMW South Africa has introduced a dual port export model involving the ports of Durban and Maputo in Mozambique because of the substantial increase in its production for the export market.
Grindrod Freight Services, which handles road freight logistics for BMW SA and is part of the listed integrated logistics service supplier company Grindrod, is the private operator of the concession for the Maputo car terminal and was instrumental in cementing the deal in Mozambique.
The domestic automotive industry has been critical in recent years about the service levels and cargo costs at South Africa’s ports but this does not appear to have contributed to BMW SA’s decision.
Bodo Donauer, BMW SA’s managing director, said yesterday that it had increased its production output with the introduction of a third shift towards the end of last year and its overall annual production would increase to more than 80 000 units this year from about 50 000 units.
“At the same time, the total number of BMW vehicles exported from South Africa will more than double from around 33 000 to almost 70 000 vehicles a year,” he said.
“In line with this increase in volumes, we had to look carefully at our export logistics and using Maputo in conjunction with our existing export supply chain in Durban makes sound business sense.”
Donauer said about 20 percent, or 14 000 vehicles a year, would be exported using the Maputo car terminal in Mozambique but BMW SA remained committed to working closely with Transnet and would also be increasing the SALES to the vehicle rental industry boosted new car sales last month, while strong sales of light, medium and heavy trucks were attributed to higher levels of investment spending partly related to infrastructural development projects.
New car sales increased last month by 6.4 percent to 40 274 units from 37 844 units sold in July last year.
Sales of new light commercial vehicles, bakkies and minibuses grew year on year by 9.2 percent to 15 047 units last month, medium trucks by 19 percent to 990 units and heavy trucks and buses by 13 percent to 1 829 units.
Nico Vermeulen, the executive director of the National Association of Automobile Manufacturers of SA, said total number of BMW vehicles exported through Durban by more than 60 percent, or an additional 20 000 vehicles a year.
Transport and logistics services have always been a challenge for South African automotive manufacturers because of the country’s location far from the large automotive markets.
Donauer said that to combat these challenges, BMW SA had made investments and implemented plans to ensure sustainable, long-term logistics services for its expanding exports programme, improve existing supply chain corridors and validate any potential new supply chain corridors within southern Africa.
He added: “The decision to use Maputo is the first step in ensuring the development of a robust, well thought out and yesterday that strong sales to the car rental industry had contributed to sales last month and this trend was expected to continue over the next two months.
Vermeulen said the excellent performance in sales of light, medium and heavy trucks indicated higher levels of investment spending, which was partly related to infrastructural development projects.
He said new vehicle exports declined by 3.6 percent, or 994 units, last month to 26 608 vehicles from 27 602 vehicles exported in July last year, but the industry remained on target for volume growth in new vehicle exports of about 18 percent this year.
Cyril Zhungu, the general manager of the motor competitive logistics network, which includes access via multiple SADC [Southern African Development Community] ports and can easily incorporate sea, rail and road freight.”
Nissan South Africa in late 2008 switched its completely built-up vehicle imports from Durban’s port to Maputo to benefit from lower costs.
Veralda Schmidt, Nissan SA’s spokesperson, confirmed yesterday that the company still used both ports to ensure it received stock quicker from a logistical viewpoint.
Rella Bernardes, a spokesperson for the Ford Motor Company of Southern Africa, said it used Port Elizabeth for its engine exports and Durban for its vehicle imports and exports.
The inefficiency and high costs at South African ports division at WesBank, said consumer demand remained very positive but contract periods had increased slightly from 68 to 69 months on both new and used cars, while there had also been a 19 percent increase in the demand for balloon payments between January and last month.
“This indicates consumers are using the structure of the finance agreement to maintain the affordability of the monthly repayments,” he said.
Wessel Steffen, the head of Absa Vehicle and Commercial Asset Finance, confirmed the lengthening of the vehicle finance contract term to 72 months as the number of applications in this contract term category increased each month. – Roy Cokayne resulted last year in the establishment of the State-Owned Companies’ Automotive Industry Competitiveness Forum. President Jacob Zuma and Transnet announced a R1 billion rebate on port charges for manufactured exported goods until Transnet came up with a new pricing strategy for port tariffs.
Nico Vermeulen, the executive director of the National Association of Automobile Manufacturers of SA, said the forum was functional and working.
Vermeulen said one-on-one interviews were taking place between the Public Enterprises Department and chief executives of all the major vehicle manufacturers to establish what challenges were faced by manufacturers on a companyby-company basis.