BMW Group SA and sub-Saharan Africa CEO Tim Abbott
Production at BMW Group South Africa’s (BMW SA’s) Rosslyn plant could, potentially, reach a new record in 2019.
BMW SA started production of its first X3 models in April, following a R6.2-billion investment to move from 3 Series sedan assembly to building the new X3 sports-utility vehicle.
Speaking at a media function in Midrand on Thursday, BMW Group SA and sub-Saharan Africa CEO Tim Abbott said the Rosslyn plant was still ramping up to its new, increased full production capacity of 76 000 units a year – up from the previous 71 000-unit-a-year capacity – but that a new record could be possible in 2019.
Production reached 53 105 units in 2017. Peak production, to date, was in 2015, at 71 353 units.
“There is excellent potential for the plant to produce the highest number of cars in its history,” said Abbott. “Every car we build is sold. We are delighted with the uptake of the vehicle.”
Abbott did not want to divulge the percentage of local content on the new X3, noting only that it was higher than on the 3 Series.
“The new Automotive Masterplan has a target on local content and we want to make sure we meet that target.
“We are always looking for more local suppliers.”
The introduction of the X3 at the Rosslyn plant has seen a shift in BMW SA exports from the US, to Europe. The US received about 65% of 3 Series export volumes from Rosslyn.
BMW SA exported its first X3 models to Europe in April. The biggest markets include the UK, Germany, Italy and France.
Around 30% of BMW models sold are X-models.
Abbott said he was hopeful South Africa could negotiate a free trade agreement with the UK, on the back of Brexit.
“It is extremely important to us. We import parts from the UK and Mini is built in the UK.”
South Africa’s premium vehicle segment would, most likely, see another 10% drop in 2018, similar to the decline witnessed in 2017, said Abbott.
“This is to be expected in the current economic environment.”
The overall new-car market was expected to be fairly flat for the year.
Abbott expected to only see growth in the South African premium vehicle segment in 2019, “on the back of a positive election”.
The premium car market should reach between 52 000 and 53 000-unit sales this year, he said.
He added that the BMW head office in Germany was not too concerned about talk of land expropriation in South Africa.
“I don’t think President Cyril Ramaphosa wants to touch the economy; least of all a production plant. We are watching developments around this with interest, but we are fairly relaxed.”
BMW SA aims to move to 100% renewable electricity at its Rosslyn plant, said Abbott.
About 30% of Rosslyn’s current electricity supply comes from the Bio2Watt project, which uses manure from more than 25 000 cattle to generate electricity.
“We are looking at ways to increase that to 50%. By using renewable credits, we hope to get off the grid by 2019.”
BMW SA has also decided to donate 20 X3s, valued at around R15-million, to universities, nongovernmental organisations and training facilities.
The first recipient of an X3 is the Rhino Orphanage, which looks after rhinos orphaned through poaching activities.