Ford South Africa plant completes $500m upgrade

The Detroit News - Ford Motor Co. this week marked completion of its $500 million investment in South African operations to produce diesel engines and Ranger compact pickups for global export.

Ford spent two years expanding its Struandale engine plant in Port Elizabeth — to increase capacity to 75,000 diesels and 220,000 engine component kits —and its Silverton Assembly Plant in Pretoria for the Ranger.

As an emerging market, South Africa is not as big as China or India. But it is Ford's presence on the continent and has been made into a global hub.

"Somewhere down the pike, Africa will hit that growth curve as well," Jeff Nemeth, president of Ford Motor Co. of Southern Africa, said in an interview Tuesday.

Ford has about 10 percent market share in South Africa and is fourth in annual sales. Toyota Motor Corp. and Volkswagen AG battle for the top spot and General Motors Co. is third, Nemeth said. Ford and GM were neck and neck but GM pulled ahead with strong sales of its compact pickup and subcompact Spark. Ford employs about 2,900 in South Africa, and has about 127 dealers.

"With the Ranger, we should be able to catch up," Nemeth said. Pickups account for 19 percent of the local market, which has annual sales of about 500,000.

But the South Africa investment was not just to bolster the domestic market. Ford was "transforming our operations from a domestic to global manufacturing site," Nemeth said.

Monday Ford launched production of the new four- and five-cylinder Duratorq diesel engine in Struandale, which used to make gasoline engines.

Now Struandale is the only Ford facility that machines the components as well as making the engine. Completed engines go to Silverton to be put in the Ranger.

The machined components are used for engine kits, which are exported to Ford's other Ranger assembly plants in Thailand and Argentina.

"This new diesel engine will help drive our transformation in South Africa, and it is a key reason the all-new Ford Ranger pickup truck is a class leader," Lewis Booth, Ford chief financial officer, said in a statement.

"This all-new Ford Ranger will be exported from South Africa to 148 markets around the world, solidifying South Africa's role as a key operation in Ford's global manufacturing footprint," said Booth, who was in South Africa this week.

To meet these goals, Ford boosted capacity at Silverton to 110,000 pickups annually.

Nemeth said Ford has started building prototypes of the new global Ranger with the Struandale-built engine. Production of pickups for sale and export will begin in September.

Before the investment, Silverton was building the Ranger, Focus and a Fiesta-based pickup called the Bantam for the South African market. While plant capacity was 80,000 units, less than half was being utilized.

Building a single vehicle provides necessary scale and global efficiency for the operations in South Africa, Nemeth said. "We can begin to be globally competitive and part of Ford's global manufacturing network with world class facilities."

The industry trend over the past decade is for export-focused production centers, said analyst Michael Robinet of IHS Automotive in Northville.

"South Africa is an interesting outpost," he said, with similar time zones to Brazil and Europe and trade incentives making it an attractive export hub.

The Ranger will be exported to 148 markets — but the United States and Canada are not among them.

North America still sells the previous-generation Ranger made at the Twin Cities plant in St. Paul, Minn., but sales have been slow and production will cease at the end of the year.