'Made in Africa' cuts costs for BMW
May 11, 2005
By Ralf Krueger
Hi-tech out of Africa is paying off, at least for BMW. Solely with the label "Made in Africa" the German-based car maker saves about E600 (R4 800) on each car it exports to the US.
This is made possible by the US African Growth and Opportunity Act, which lets particular African countries enjoy a tax-free export of their products.
BMW was the first car maker to grab the opportunity.
Almost half of the 55 555 BMW 3 Series cars assembled in South Africa each year are shipped to the important US market, equivalent to about one third of all 3 Series car imports there.
For the latest generation of the series - which went into production simultaneously in Regensburg, Munich, Leipzig and South Africa - the company is planning to increase South African output.
Wolfgang Stadler, the boss of BMW's subsidiary at Rosslyn, near Pretoria, said: "In the short term, we will boost production to 60 000 units [a year]."
But even with this move, the plant, where until recently 3 000 employees assembled 200 cars a day, would be far from reaching maximum capacity.
Since 2002, BMW has pumped R2 billion into the plant's development and created the conditions for an annual capacity of 75 000 by installing a spray-painting line and introducing flexible shifts.
Apart from engines and gearboxes, everything in the "African 3 Series BMW" comes from South Africa. Almost all suppliers are situated in an industry park close to Rosslyn.
Established in South Africa 30 years ago, the BMW plant has rapidly developed from a mere assembly facility for supplied kits to a fully fledged production line for the world market.
The plant is regarded by BMW as a role model in more than one respect. For example, an HIV prevention and treatment programme initiated for employees and the plant's quality workmanship have both been called "exemplary".
In 2002, the facility earned itself an award as best "European" factory from its mother company.
"European" because at that time a separate "African" category did not yet exist.
About 80 percent of Africa's vehicle output is concentrated in South Africa, where the big car firms have invested billions in their plants since the country's adoption of democracy.
Since 1998 BMW's Rosslyn plant has not only been exporting its vehicles to the US, but to Japan, Australia and New Zealand as well.
Only 20 percent of its production is sold on the domestic market.
|
|
