BMW to dig deep for SA plant upgrade

GERMAN car maker BMW is to invest more than R6-billion in its South African subsidiary to build the next-generation X3 sports utility vehicle‚ the company have announced.

The manufacturing of the X3 will replace that of the 3-series sedan‚ which has been assembled at BMW SA’s Rosslyn plant‚ near Pretoria‚ since 1983. The investment is believed to be the biggest to date in SA’s motor industry.

BMW SA managing director Tim Abbott said more than R3billion would be spent upgrading Rosslyn and another R3billion on components suppliers‚ launch costs and training.

The announcement came a week after the Department of Trade and Industry announced that it would continue to support the motor industry once the incentive-based automotive production and development programme (APDP) expires in 2020.

Delays in announcing the results of a programme review had caused fears that the policy stability‚ which has attracted substantial foreign investment in recent years‚ might be under threat.

Trade and Industry Minister Rob Davies on Monday said that since the APDP was launched in 2013‚ it had attracted R25-billion in investments from vehicle and components producers. The review would pose no drastic changes or disadvantages to investors.

Abbott would not say when assembly of the X3 would begin but it is expected to be around 2019‚ when the lifecycle of the current BMW SA 3-series is due to end.

If so‚ the investment will be made during the APDP and BMW SA will be able to recoup at least 20%‚ and possibly up to 30%‚ under the programme’s automotive investment scheme.

Motor companies can also currently earn duty rebates on imported vehicles and components. Some – including Volkswagen SA‚ which earlier this year committed itself to spending R4.5-billion in the next two years – say they have received government assurances of further similar benefits.

Rosslyn plant director Stefan Huelsenburg said BMW SA would have to “renovate and restructure” the assembly plant. Upgrades would begin next year. Production of the 3series would continue during the process but there would be a shutdown to switch from the old product to the new.

Rosslyn is one of four BMW plants producing the 3-series. Its share will eventually be allocated to other plants. It will be one of two building the X3‚ as the junior partner to BMW’s Spartanburg‚ South Carolina‚ plant in the US. — BDLive