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.