By Mike Whitfield
Last month, Nissan announced fresh plans to start building its award-winning Navara one-ton pick-up at its Rosslyn plant in Pretoria – South Africa, a significant leap for Nissan’s industrial expansion in Africa.
The Rosslyn plant was renowned for producing different vehicles for 60 years but started operating exclusively as a Nissan plant since the 1980s, and very recently, became a light commercial vehicle hub for the production of the Japanese engineered NP300 Hardbody and NP200 pick-ups, which are exported to 45 African markets.
In 2020, when the first Nissan Navara models start rolling off the production lines, we will have a major contender in the continental market.
The vehicle is not only designed for Africa, but made in Africa by Africans and will in the process, increase the competitiveness of the Rosslyn factory and create almost 1,200 new jobs at the plant as well as across the supply chain with an investment of almost US $207-million.
This achievement is expected to also transform Nissan’s South Africa supply chain network by developing 13 new black-owned suppliers and setting localised content targets by 60% for the South African-built Navara.
The decision is the result of a very long and very deep relationship with the South African government on the need for a sustainable and competitive automotive industry, which is being demonstrated through a series of progressive automotive industrial development plans, culminating in the ambitious South African Automotive Masterplan 2035.
This will not only set targets but provides investment security and planning certainty for the next 16 years, while also ensuring that the plant meets world class standards through constant human resources’ appraisal.
Today, the Rosslyn plant has been declared an anchor factory for Nissan Africa, Middle East and India region.
Our vision therefore, is to develop manufacturing hubs in other African countries – in addition to our two facilities in Egypt and Nigeria – because we believe that Africa is not just the last frontier for the automotive industry, but a significant catalyst for industrialisation and growth.
The two, of course, go hand in hand; automotive manufacture is an incredible spur to a country’s industrialisation, implying that as a country industrialises and diversifies its economy, so its GDP increases and its people become financially sustainable.
We have seen this with the so-called Asian Tigers and most recently with China.
Africa is like China 20 years ago; a very low level of motorisation and a very low GDP but what happened in China was that of an unequivocal determination to create growth, so policies were put in place, just as the Asian Tiger economies, and growth followed suit afterwards.
Nissan’s objective is to replicate this accomplishment by working with African countries who are desirous of creating a sustainable and competitive automotive industry.
Africa is at the very beginning of this phase and we have partnered with countries which we believe have both the potential for rapid growth and the will to work with us in creating this highly specialised industry.
We were the first movers in Nigeria and we have signed a memorandum of understanding (MOU) in Ghana and we are looking at other countries in Africa where there is similar potential, like Kenya and Ethiopia.
When we started manufacturing in Nigeria in 2013, the country had a population of more than 150-million people and a buoyant economy that was brimming with incredible potential for growth, but suddenly, African economies stumbled, first with the drop-in demand for oil and then the simultaneous slump in commodity prices – upon which most of the continent’s economies are based.
The last five years have been immensely tough, Angola and Nigeria, both predominantly oil economies, are achieving about 10% of the volumes they were seeing in 2014, but we kept the faith in Nigeria and continued with our commitment to the assembly plant.
Next door in Ghana, we signed an MOU at the end of last year. The level of cooperation and commitment by the government of Ghana towards creating their own assembly plant has been phenomenal.
We are working very hard with the Nigerian authorities to review the policy framework. By contrast though, the work that is progressing on the policy front in neighbouring Ghana is going ahead so quickly and so comprehensively.
Policy is one aspect, and size of the potential market is another concern when prospecting for investment opportunities.
In Ghana for instance, the Total Industry Volume (TIV) which measures overall market demand is only 10 000 vehicles a year of which, we as the country’s top brand with 32% market share, would be looking to produce just more than 3,000 vehicles a year initially.
It’s very different to the Rosslyn scenario and South Africa’s TIV of more than half a million, with Nissan’s projections in excess of 50,000 vehicles a year.
Creating an automotive industry in a country is a stridden approach; you can’t go straight in with a Complete Knocked Down (CKD) approach, but rather begin with Semi Knock Down (SKD) and then more complex SKD as we build the motor sector–and the local supply chains to support this. The level of investment will always be proportionate to the scale of the industry.
The potential of developing this sector is immense as South Africa has shown us. Down south, the sector generates around 7% of the annual GDP and accounts for a third of its exports with plans by government, labour and the National Association of Automobile Manufacturers of South Africa (Naamsa) to grow domestic output to account for 1% of global output by 2020 and creating a globally competitive and transformed industry.
In turn, Nissan aims to double its presence in Africa, the Middle East and India by 2022 through our mid-term M.O.V.E. strategy. And as Africa continues to grow, we will be in the right position to support these African countries, bringing real mobility solutions to the people – and helping transform their economies.
Mike Whitfield is Managing Director, Nissan Group of Africa, as well as Vice President, Association of African Automotive Manufacturers (AAM) and immediate Past President, National Association of Automobile Manufacturers of South Africa (NAAMSA).