Logistics sector takes stock of shifting gears in auto industry

Shifts in the local motor industry will have farreaching impact on the logistics sector. These include Volkswagen’s decision to stop production of the Golf 1, Nissan’s expansionary plans and a decision by General Motors not to sell off Opel. Long-established supply contracts and lines supporting the Golf 1 since its launch in 1978 have been switched off after the Uitenhage factory produced more than half a million of the cars, which ended their run branded as Citi Golfs. Volkswagen has not announced a replacement for the Citi Golf, which was the fourth highest selling car in South Africa in October. One bright spot in an otherwise dull outlook for the industry is that Nissan South Africa is looking to ramp up vehicle production at its Rosslyn manufacturing plant to 45 000 units this financial year, after falling short of meeting this target in 2008 because of the global economic crisis. Nissan says “new opportunities” have opened up in the export market with growing demand for the NP200 half ton bakkie, as well as the Renault Sandero which is built at the Nissan factory under the Renault Nissan Alliance. “If you look at this financial year, I think we are one of the few manufacturers in the South African market that is actually forecasting a higher volume than we did last year because of these opportunities,” says Neil Craddock, Nissan SA’s manufacturing plant general manager. Long logistics lines and “materials management both of overseas and local suppliers” are major challenges. Now that the company is sourcing from a variety of countries, and not just Japan as previously, production is often hampered by long lead times and packing configurations which are at odds with the production line’s requirements,” he says. GM’s decision to keep Opel has thrown the company’s Port Elizabeth plant a life-line after the loss of Hummer. The popular Corsa Utility is assembled in South Africa, which gives the company a foundation with which to compete for future Opel assembly contracts – providing it can overcome the logistical challenge of distance and local component supply constraints.