BMW to invest 2.2bn in SA

Pretoria - BMW has invested R2.2bn in the South African economy to enable production here of a new vehicle series.

The announcement was made by National Economic Development Minister Ebrahim Patel on Monday at a function in Pretoria to mark the start of production at Rosslyn of a contract to assemble the sixth generation of the BMW 3 Series that was agreed some time ago and will run for seven years until 2018.

"[This] is a private-sector vote of confidence in our economy," Patel said in a speech prepared for delivery at Rosslyn in Pretoria, HQ of BMW in South Africa. It is also a huge vote of confidence from BMW worldwide in the ability of BMW SA to produce the quality of vehicles required.


The production contact will eventually generate 600 jobs and is a major triumph for BMW South Africa against competition from around the world. The automaker’s home plants in Munich will produce the bulk of 3 Series production, followed by South Africa with an initial build of 50 000 cars a year rising to 90 000 annually.

The production run will involve a third shift at the Rosslyn plant.

The cars will also be assembled in Shanghai, China.

BMW SA exports about 85% of the cars it assembles. The plant's current capacity stood at 55 000 units a year but Patel said this was likely to exceed 90 000 a year with the new investment and build contract.

This will be the third 3 Series range to be assembled in South Africa since the first major agreement back in 1999 which in itself followed an investment in BMW SA of R1bn in 1996 to prepare for the original challenge. The South African-built cars will be supplied to all right-hand drive markets as well as to the US.


Frank-Peter Arndt, member of the BMW AG management board responsible for production, said at the function: “The BMW 3 Series is the most important volume-produced model of the BMW Group as well as the biggest-selling model in the entire premium segment.

“At the same time, every generation of the 3 Series sedan has been built in Rosslyn and since 1999 this plant has been responsible for production for important export markets such as the USA, Canada, Japan, Singapore and Australasia to name but a few.

“In 2009 – when the economic crisis reached its peak – we decided to invest R2.2bn to increase production capacity here in South Africa to produce the new 3 Series Sedan.

“This was the clearest statement we could make at the time.”

Speaking at the event to commemorate the official start of production Arndt, also chairperson of BMW SA, explained that while the investment safeguarded around 2 500 jobs in the middle of the recession it would ultimately lead to significant increases in production, export and employment in years to come.

“In 1973, Rosslyn became the first BMW production facility to be established outside of Germany,” he reminded, “so it is fitting that, almost 40 years later, production of this new model signals the beginning of a new era of innovation, passion and commitment for the BMW Group in South Africa.

“Even though the global economic outlook remains uncertain, we remain true to our commitment to this production location. By the end of 2012 we plan to introduce a third shift. This will significantly increase the installed production capacity above 90 000 units. It will more than double BMW 3 Series exports from South Africa and will create 600 jobs at Rosslyn. This is again a strong signal – for our staff, our suppliers and South Africa as an industrial location.”

The South African motor industry development programme will soon be replaced by an automotive production and development programme. The latter will focus on production incentives that calculate benefits on the basis of actual local production value (local content), and not on material cost, as was the practice under the previous one.
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