Eastern Cape well positioned as vehicle export hub for Africa

Dedicated car terminals in the ports of Port Elizabeth and East London, together with original equipment manufacturers (OEMs) focusing on growing their share of the African market, put the Eastern Cape in a strong position to be the hub of South African vehicle and component exports to Africa. In September, president Jacob Zuma visited the three motor manufacturers in the Eastern Cape – Volkswagen, General Motors and Mercedes-Benz, as well as the Ford engine plant in Port Elizabeth. The plant produces the diesel engine for the new Ranger one-ton bakkie, which Ford plans to export to Africa. Port Elizabeth-based General Motors has taken an early lead in the province’s race to grow its African base through the commissioning of a parts warehouse in the Coega Industrial Development Zone (IDZ) to serve Africa, and plans to start assembling an Isuzu bakkie designed for the African market. Ngqura has been designated as the South African transit hub for cargo to Africa and elsewhere, which means that the logistics are in place for the export of components to the rest of the continent. China’s FAW trucks has also announced that part of the production of its new plant in Port Elizabeth will be destined for the rest of the continent. All the Eastern Cape assemblers will have some catching up to do – Pinetown-based Toyota exports Hilux, Fortuner and Corolla models to 46 countries in Africa. At 28 942 units, it held 68% of the export market from South Africa into Africa in 2010. It was followed by Nissan, with 8 301 units. News of the decision to build the plant comes at a time when the National Association of Automobile Manufacturers of South Africa is predicting that exports of South African-made vehicles into Africa could “easily triple” over the next 10 years – provided that a free trade area is established. In 2010, sales into African countries accounted for only 44 691 out of a total of 239 465 South African-built vehicles that were exported. The African volume was 5% up on 2009, while overall exports grew by 37%. The biggest opportunity in Africa is seen as bakkies and light commercial vehicles, as the importers of second-hand vehicles do not focus on this sector. Africa is awash with secondhand heavy trucks and passenger cars, which are essentially dumped on the market and come in at prices with which new vehicles cannot compete. Keeping logistics costs down through the provision of efficient vehicle terminals is essential for South African-made vehicles to compete in Africa. Transnet has said that it intends transforming the current manganese and liquid bulk terminals in the port of Port Elizabeth into a modern car terminal. The existing facilities in both Port Elizabeth and East London are also being constantly upgraded.