Stellantis Signs MOU To Manufacture Vehicles In South Africa

South Africa’s auto assembly and manufacturing industry is a key pillar of the country’s economy. It is the largest manufacturing sector in South Africa, with a substantial 18.7% of value addition within the domestic manufacturing output derived from vehicle and automotive component manufacturing activity. The auto industry also employs over 100,000 people. Its contribution to the gross domestic product (GDP) is around 5%.

The  South African Automotive Masterplan (SAAM) 2021-2035 has the following objectives:

• Grow South African vehicle production to 1% of global production by 2035
• Increase local content in South African manufactured vehicles to 60%
• Double automotive employment in the supply chain
• Improve automotive industry competitiveness levels to that of leading international competitors
• Transformation of the South African automotive value chain
• Deepen value-addition within South African automotive value chains

Six industry development pillars have also been identified as being critical to the realization of the SAAM. The six pillars relate to:

• local market optimization
• regional market development
• localization
• infrastructure development
• industry transformation
• the development of industry-required technologies and skills

South Africa already hosts vehicle production plants for Ford, Nissan, BMW, Mercedes-Benz, Toyota, VW, and Isuzu. Now in a boost for the south African auto industry, Stellantis has signed a Memorandum of Understanding with the Industrial Development Corporation (IDC) and the Department of Trade, Industry and Competition (DTIC) to develop a manufacturing facility in South Africa. The signing ceremony took place at the office of Mr. Ebrahim Patel, Minister of Trade, Industry and Competition, and was attended by Mr. TP Nchocho, CEO of the IDC, Mr. Samir Cherfan, Stellantis Middle East and Africa Chief Operating Officer, and Mr. Leslie Ramsoomar, Stellantis South Africa Managing Director.

“This is an important step in our Dare Forward 2030 strategic plan towards strengthening our leadership in the Middle East and Africa region and becoming a major player in South Africa,” said Mr. Samir Cherfan, Stellantis Middle East and Africa Chief Operating Officer. “The manufacturing site in South Africa will be a new building block in our industrialization strategy that includes the plan to sell one million vehicles in the region by 2030 with 70% regional production autonomy and will bring us closer to our customers’ needs in the region.”

The manufacturing plant is planned for setup in a South African Special Economic Zone (SEZ). The aim is to complete this manufacturing project by 2025.

“An investment partner like Stellantis is an amazing opportunity for South Africa,” said Mr. TP Nchocho, CEO of the IDC. “Their track record in manufacturing plants around the world is impressive and we look forward to a joint venture with Stellantis to build a successful plant in South Africa. Another brick in the foundation towards our target of producing a million cars locally in SA.”

It’s great to see that another vehicle production plant is coming to South Africa. Since this will be a new set up, it will be interesting to see which models Stellantis will produce in South Africa, especially as the world is transitioning to electric vehicles. We will follow this very closely for updates and to see how this evolves.