Ford in drive to boost exports
Carmaker considers further investment in Silverton plant to increase production capacity
THE FORD Motor Company is considering investing further in its plant in Silverton in Pretoria to increase its production capacity to take advantage of new export opportunities for the Ford Ranger.
Jeff Nemeth, the president and chief executive of Ford’s sub-Saharan Africa region, said yesterday that the Ranger continued to have a global footprint that exceeded expectations and the Ford Motor Company was continually talking to them about its capacity and opportunities to take on more export markets.
“There may be something that happens next year or maybe not. It depends on what the global Ranger footprint is like and what it costs to put more capacity into South Africa compared with Argentina.
“We are working through all of those (issues) and hopefully I will be able to announce something next year around higher exports,” he said.
Good news
Nemeth said exports of the Ford Everest would come on line for the full year next year compared with a few months this year. “So it’s all really good news for exports from us.”
The Ford Motor Company of Southern Africa has in the first 11 months of this year exported 48 597 vehicles, of which 48590 were Ranger models and seven Everest units.
Everest exports only commenced last month.
The Ranger units produced in South Africa are exported to 148 markets globally.
Ford in April reported it had invested R2.5billion to expand its operations in South Africa to produce the new Ford Everest at Silverton assembly plant, with domestic production of the model commencing in the third quarter of this year.
This followed Ford in 2012 commencing production of the Ranger in South Africa after investing R3.4bn in some of the latest automotive manufacturing technologies at its Silverton plant and its engine plant in Port Elizabeth, which also increased the annual production capacity of the Silverton plant to 110000 units.
Nemeth said market share in Europe for Ranger was continuing to increase and it was the best selling bakkie in Europe but this was offset by fewer exports to sub-Saharan Africa.
“What we are really looking at is when will Africa and the Middle East come back because that is really where we can see the most growth in exports,” he said.
Vehicle exports into African countries have been depressed this year because of the economic and foreign exchange problems many countries have experienced because of the significant decline in commodity prices.
Nemeth forecast total industry vehicle sales next year to be flat or possibly 1percent or 2percent higher.
Jason Muscat, the senior industry analyst at FNB, said South Africa “dodged a bullet” last Friday when the country avoided the downgrading of its debt to junk status by global credit ratings firm S&P Global Ratings.
However, Muscat said South Africa was still on the cusp of a junk rating, which would mean the cost of funding in the country would start to increase and precipitate increases in interest rates and inflation.
“It is certainly something that we want to avoid and something that will be critical to future growth in the motor sector he said.
Muscat said new vehicle sales were expected to contract by 12 percent this year and FNB’s modelling indicated a further contraction of 5 percent next year.
“In our view, potentially a worst case scenario would be another contraction but certainly a best case scenario in all likelihood would be a flat new vehicle market,” he said. in South Africa,”