BusinessDay - Exports into the rest of Africa of South African-manufactured vehicles could "easily triple" in the next 10 years, says the National Association of Automobile Manufacturers of SA (Naamsa).
This could fuel a large expansion of the local motor and related industries. However, it would depend on a proposed "grand free trade area" going ahead and improvement to transport links between the countries party to the deal.
President Jacob Zuma was one of several African leaders who signed an agreement at the weekend to enter talks on launching a free trade area which would encompass 590- million people and a combined economy worth $860bn.
Naamsa director Nico Vermeulen said yesterday the advantages of the free trade area were discussed at Business Unity SA and at Nedlac. Local vehicle manufacturers see great potential in the proposal.
Nissan Africa regional GM Jim Dando said yesterday that the development could be hugely beneficial to his company, which builds a one-ton bakkie at its Rosslyn factory.
He "completely agreed" with Mr Vermeulen’s assessment that exports into the rest of Africa could triple within a decade.
Reduced tariffs would make South African-manufactured vehicles more attractive than other imports into African markets, Mr Dando said.
"It will increase volumes and cut out the Thai imports (to other African markets)," he said, in reference to Nissan and Toyota operations in Thailand. Nissan’s one-ton bakkie, known locally as the NP300, would be the main beneficiary of reduced tariffs.
"It’s very exciting," Toyota SA spokesman Leo Kok said on behalf of CEO Dr Johann van Zyl. "Inter- country trade in Africa is very small. The agreement would grow the African economy."
Toyota SA, which already exported significant numbers of its Hilux bakkie, would certainly benefit and "take advantage" of such a free trade arrangement, Mr Kok said.
Toyota exports the Hilux, Fortuner and Corolla to 46 countries in Africa, all of which are built at the company’s Durban plant.
Mr Kok said the proposed Transnet vehicle terminal was close to the company’s Durban factory. It would have an "extreme impact" on Toyota’s business.
"It will help smooth our logistics significantly and will help us save on costs. It will also help us reduce our carbon-dioxide emissions in getting cars to the port, so we’re really excited about it," Mr Kok said.
Ford SA vice-president and CEO Jeff Nemeth said his company already planned to target African markets with its new Ranger one-ton bakkie. Ford "has always supported free trade agreements" and Africa was "a space to watch".
Local manufacturers would benefit from reduced duties and the savings made by proximity to their markets, Mr Nemeth said. "We’ll pretty much shut everyone out."
However, he cautioned that as a result of the importation of used cars, the African market for new cars was "something like 700000 to 800000 units — 500000 to 600000 of which are in SA".
Mr Vermeulen said various infrastructure challenges remained, such as the state of road and rail services in Africa, but that "these are being addressed".
Mr Dando agreed. "It costs about $4000 to ship a car from SA to Matadi in the Democratic Republic of Congo, whereas it costs just $800 to ship a car from Japan to Europe. It’s a big, big challenge."
Bakkies were to some extent protected from competition from grey imports of new and used vehicles — widely available in the rest of Africa, but banned in SA. "Our products are well-priced and have a good reputation," Mr Dando said.
The fact that importers of used vehicles into Africa did not focus on pick-ups was also a big opportunity for local motor manufacturers.
