Chinese keep auto industry wheels turning in Port Elizabeth

Fully imported components are keeping the wheels of South Africa’s newest vehicle assembler – the FAW truck plant in Port Elizabeth – turning. FAW is geared up to produce 5000 medium heavy vehicles a year for the South African and African markets, according to FAW South Africa chief executive officer Yusheng Zhang. About 40% of the planned production will be supplied into the South African market, with the remaining 60% being exported. The plant is using 100% imported components, which protects it from the current metalworkers’ strike which has seen component manufacturers in South Africa halting production. A large number of Chinese managers and supervisors were also evident on the factory floor during an official tour. FAW’s ramping up of production has helped maintain volumes through the two Port Elizabeth ports, which lost Ford imports to Durban earlier this year. The loss of Ford components will be made up in part by increased supply of engines and components from the Ford engine plant in Struandale, Port Elizabeth, to the global Ford network. Ford chose the day of the FAW launch to announce that it was adding a third shift at its plant in order to meet demand. Transnet National Ports Authority figures show that in June the ports of Ngqura and Port Elizabeth handled a total of 70 678 TEUs. This is significantly less than the 84 720 handled by the two ports in the same month of 2013, with Ngqura showing the biggest decline. This could also be attributed to the strike by Numsa members in the port. South African government support for the Chinese investment was signalled by the presence of president Jacob Zuma and trade and industry minister Rob Davies at the launch. Speaking after keeping delegates waiting for more than three hours, Zuma said the government remained committed to its Vision 2020 strategy which aimed to double local vehicle production “and broaden and deepen component manufacture by the year 2020”. With widely reported rumours of European and American manufacturers reconsidering their South African operations, the country is looking to Chinese manufacturers to hit the target. Pepi Silinga, chief executive officer of the Coega Development Corporation (CDC), told delegates at the launch that the CDC was in talks with other Chinese manufacturers. “We are pushing other OEMs (original equipment manufacturers). One is close to committing. Also from China.” The FAW plant is in the Coega Industrial Development Zone. Davies used the opening of the FAW plant to announce that regulations required to include the medium and heavy commercial vehicles in the new automotive production development programme (APDP) were close to finalisation. It is known that FAW management were concerned by the delays in the regulations. Davies did not specify how many trucks would have to be manufactured or assembled to meet the requirement. FAW also has plans to produce 35 000 passenger vehicles a year in the Coega IDZ. CAPTION 1 The new R600-million FAW production facility in Port Elizabeth. CAPTION 2 After keeping delegates waiting for more than three hours, President Jacob Zuma, pictured here with Minister of Trade and Industry Dr Rob Davies at the FAW plant, said the government remained committed to its Vision 2020 strategy for the automotive industry.