FMCSA president and CEO Jeff Nemeth
Photo by: Duane Daws
South Africa’s Automotive Production and Development Programme (APDP) had boosted Ford Motor Company of Southern Africa’s (FMCSA’s) manufacturing competiveness, the vehicle manufacturer said on Tuesday.
The Department of Trade and Industry (DTI) had introduced the APDP for the period from 2012 to 2022, in January 2013, to replace the Motor Industry Development Programme.
The incentive programme was aimed at increasing the total number of vehicles produced in South Africa from 525 000 cars and light commercial vehicles in 2013 to 1.2-million vehicles a year by 2020 – a plan that, according to FMCSA, was working.
Speaking at the fourth Proudly South Africa Buy Local Summit and Expo, held in Sandton on Tuesday, FMCSA president and CEO Jeff Nemeth said a country’s attempts to provide lucrative incentives made it an attractive investment destination for the automotive industry.
In line with this, South Africa had become an important base for the company, providing FMCSA a competitive advantage against rival vehicle manufacturers in Thailand and Brazil, besides others.
The APDP enabled FMCSA to maximise its production capacity and export two-thirds of its South African produced vehicles to around 140 countries, allowing it to develop a significant export base and somewhat offset its geographical disadvantage, he said.
South Africa, much like Australia, was far-removed from the major export partners and required attractive incentives and a stable regulatory environment that provided certainty to bring investment to the country.
Ford Motor Company, along with other vehicle manufacturers, was preparing to exit Australia in the next few years amid unyielding regulations.
However, FMCSA would not likely be able to double its production in South Africa unless the “business velocity” increased, said Nemeth, referring to the need for improved ease of doing business, infrastructure, particularly ports and rail, and affordable logistics.
“The faster we can [increase] our economic velocity, the faster we can expand capacity,” he commented.
FMCSA had already doubled its capacity over the past three years, and it was feasible for the firm to double this again over the next three years, should the challenges be resolved.
“Right now, we can’t supply enough Rangers to the world from South Africa,” Nemeth pointed out.
The company had engaged parastatal Transnet, which, Nemeth said was attempting to assist FMCSA in ensuring ease of transport and exports.