BMW is investing R4.2 billion in its Rosslyn plant over the next five years, enabling the manufacturer to build its first new energy vehicle (NEV) in the country.
BMW Group South Africa board chair Dr Milan Nedeljković said the next-generation BMX X3 plug-in hybrid would enter production at Rosslyn, an industrial suburb in northern Pretoria, in 2024.
Unlike the petrol-powered X3 currently being made at the plant, it will be destined solely for the export market and not sold in South Africa.
“With this investment in electrification and digitalisation, the BMW Group is further underlining its commitment to South Africa forged over five decades in the country,” the manufacturer said.
“This secures the future of BMW Group Plant Rosslyn, as well as the livelihoods of more than 20,000 people directly and indirectly employed at BMW Group South Africa’s facilities and within its supply chain.
“Additionally, it underscores the BMW Group’s role as a key player in the South African automotive industry’s move towards a green economy.”
Rosslyn plant director Dr Niklas Fichtmüller will be responsible for ensuring the Rosslyn plant’s readiness for the new product.
Fichtmüller’s task will include overseeing the plant-wide training programme for the new model.
Over 300 BMW Group Plant Rosslyn associates will also receive specialised training to support the model’s production.
Over 1.6 million vehicles have been manufactured in Rosslyn and exported to more than 40 countries worldwide.
Aside from the BMW X3, cars made at the factory included the BMW 1800 SA and BMW 2000 SA, and the BMW 3-, 5-, and 7-series. The plant employs over 3,500 associates.
With the addition of BMW, three vehicle manufacturers now make NEVs in South Africa.
Toyota has been assembling the Corolla Cross hybrid SUV at its Prospecton Plant in Durban for about two years.
Mercedes-Benz has been doing so for much longer, with the export-only plug-in hybrid version of the C-Class assembled at its East London plant since 2016.
It remains to be seen which manufacturer will be the first to start making fully-electric cars in South Africa.
The vast majority of cars assembled in South Africa get exported to other countries.
In 2022 alone, 351,785 of the 555,889 cars assembled locally were exported to 110 global target markets.
There is a growing appetite for electric vehicles in many of the biggest markets to which South Africa exports these cars.
Roughly half the country’s exports go to Europe, which has an aggressive 2035 deadline for a total ban on selling new petrol and diesel cars.
That has raised warnings from the local manufacturing industry and its main representative — the National Association of Automobile Manufacturers of South Africa (Naamsa) — about the potential loss of a large chunk of their business.
The ban will include closed-loop hybrids and plug-in hybrids, so South African-based manufacturers must go fully electric at some point.
Electric vehicle policy to be published soon — with big subsidies proposed
Trade and industry minister Ebrahim Patel recently told Sunday Times that government’s official policy on EVs will be finalised by the end of 2023.
“To retain and grow our share in that market, we need a clear road map,” Patel said.
“The original road map when fully costed and all comments taken into account had expensive architecture.”
“We are now reworking it with the industry, so when we press the button, we can keep to our word,” he stated.
Naamsa has recommended aligning the current 25% import duty on electric vehicles to the standard 18% for petrol and diesel cars, as well as launching a subsidy programme that will pay out up to R80,000 to electric car buyers.
The proposed subsidies for each category are as follows:
- R20,000 for plug-less hybrids
- R40,000 for plug-in hybrids
- R80,000 for fully-electric cars
Furthermore, Naamsa said its members were prepared to match the subsidies to further reduce the effective prices of electric cars in South Africa, effectively doubling the incentives above.