SA government and BMW smoke piece pipe

The outcome of the meeting between the minister of trade and industry Rob Davies and the MD of BMW South Africa Bodo Donauer has come to calm fears that South Africa’s vehicle manufacturing industry was damaged beyond repair.

The meeting came after a prolonged strike by the National Union of Metalworkers of South Africa (NUMSA) pushed emotions towards boiling point with observers saying the strike will push manufacturers to disinvest from South Africa.

Amidst the hullabaloo there were suggestions that BMW was entertaining disinvestment from South Africa. This narrative disingenuously linked the NUMSA strike with a move by Renault-Nissan Alliance in partnership with Stallion Group to launch a vehicle assembly in Nigeria. Some commentators said this Nigerian development can be seen as taking away from South Africa.

In a joint statement released last Davies and Donauer said the meeting held on Wednesday, 9 October 2013 in Pretoria, took place after BMW sent a letter to the Minister clarifying some of the incorrect remarks attributed to BMW in recent media reports regarding its long-term investment in South Africa.

The statement said BMW South Africa re-iterated, both in the letter and in the meeting, that it remains 100% committed to the ongoing production of the BMW 3 Series Sedan at Rosslyn and is in no way, shape or form threatening any disinvestment from the region.

However, Donauer stated that it was a matter of fact that the lengthy strike action in the automotive sector and the consequent non-supply of 15.8% of annual BMW 3 Series volume, most of which was destined for major export markets, had cost BMW South Africa an opportunity to compete for a potential second model. The company envisioned this model would be produced alongside the BMW 3 Series Sedan in a second production line, if it had been awarded to South Africa.

The statement said in an open discussion, the parties discussed how they could work together to create a sustainable environment for BMW South Africa to compete for similar additional investments in the future, should the opportunities arise.

Davies said government remained committed to supporting the development of motor manufacturing in South Africa.

The statement said “Both parties committed themselves to participate in ongoing discussions with all stakeholders in the industry to create a climate to ensure its continuing growth. They therefore welcomed the proposal for a further meeting with the Chief Executive Officers (CEOs) of the major vehicle manufactures that will take place on the side-lines of the Johannesburg International Motor Show next week (this week).”

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