President Cyril Ramaphosa has praised BMW South Africa’s latest investment and the launch of the locally manufactured BMW X3 Plug-in Hybrid Electric Vehicle (PHEV) as a landmark achievement for the country’s green industrialisation ambitions.

It was also a symbol of confidence in South Africa’s economic future, he said on Thursday.

Speaking at a high-level showcase held at BMW’s Rosslyn plant in Tshwane, Ramaphosa hailed the occasion as a “celebration of progress, partnership and potential”.

“The Rosslyn plant is a testament to BMW’s longstanding presence in the South African market. BMW’s roots may be in Bavaria, but its beating heart is South African. We look forward to continuing this partnership and supporting the next chapter of your journey,” he said.

The event marked the official launch of production of the X3 PHEV, the first of its kind in South Africa, and showcased the carmaker’s expanded commitment to skills development, innovation and localisation in the local automotive sector.

“Every X3 Plug-in Hybrid Electric Vehicle that rolls off the Rosslyn production line affirms BMW’s belief in our workforce, our economy and our future,” the president said.

The Rosslyn plant, which was established in 1973, was the first BMW manufacturing facility built outside of Germany.

Five decades later, it has become a cornerstone of BMW’s global operations and a symbol of enduring industrial partnership between Germany and South Africa.

“This facility is a world-class industrial asset, and its evolution into a hub for hybrid vehicle production reaffirms South Africa’s role as a global destination for automotive excellence,” Ramaphosa stated.

He applauded BMW’s investment and long-term presence as a reflection of confidence in South Africa’s people and policy direction.

The automotive sector contributes nearly 5% to South Africa’s GDP, supports more than 115,000 direct manufacturing jobs and sustains over half a million jobs across its extensive value chain.

With South Africa ranked the 22nd largest vehicle exporter globally, the industry remains a critical pillar of national industrial strategy.

Ramaphosa emphasised the importance of transitioning towards low-carbon manufacturing, noting that electrification and green mobility were not just technological trends, but urgent responses to global climate commitments.

“South Africa is ideally positioned to be a key manufacturing base for the mobility of the future. Our policy instruments such as the Automotive Production and Development Programme and the Electric Vehicle White Paper reflect our commitment to enabling this shift,” he said.

The president also confirmed that targeted incentives were being finalised to support battery cell localisation, EV component manufacturing and beneficiation of critical minerals, given the country’s rich reserves of essential battery materials.

Ramaphosa referred to the recently announced tariff adjustments by the United States, warning that overreliance on a few export markets posed economic risks.

“This underlines the importance of diversifying our markets and accelerating local value creation,” he said.

BMW’s move to produce hybrids locally could help cushion the sector against such shocks while enabling it to tap into growing African and EU markets for clean vehicles.

Ramaphosa commended BMW’s far-reaching social impact, citing its Youth Employment Service (YES) partnership, training programmes and long-standing support for black industrialists, young women professionals and local township suppliers.

Since 1978, BMW’s Rosslyn Training Academy has trained over 2000 artisans and now trains 300 apprentices annually.

Its YES partnership has created more than 3500 opportunities for youth across multiple sectors since 2022.

Additionally, the BMW South Africa IT Hub in Tshwane employs more than 2000 professionals, including software engineers and digital specialists.

Gauteng premier Panyaza Lesufi echoed the president’s sentiments, calling the new investment “real economic transformation”, while highlighting the local economic benefits.

“This is where factories grow, businesses thrive and communities prosper,” he said.

BMW board member for production and chairperson of BMW South Africa, Milan Nedeljković, reinforced the company’s commitment to South Africa.

“The X3 was recently named South Africa’s Car of the Year, and that is a tribute to the exceptional quality of our local plant. Beyond production, we are committed to socio-economic upliftment through training, skills and inclusion,” he said.

BMW Rosslyn plant director Danny Bester also paid tribute to the dedication of plant employees, crediting their passion and technical excellence for the facility’s success.

The president invited BMW to again be a flagship partner in the upcoming South Africa Investment Conference, urging greater cooperation on localisation, skills development, battery manufacturing and township economic inclusion.

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Solidarity has applauded the revived talks between ArcelorMittal SA and the government to address the looming closure of its steel plants, but it says the outcome of the discussions must be made public.

The union said on Friday that past secretive discussions has failed to benefit AMSA or its employees.

Solidarity’s Willie Venter said in a statement that AMSA’s presentation showed the dire financial position regarding long steel products in general.

“We understand that. Still, discussions about this and action should have taken place a long time ago to reposition the Newcastle and Vereeniging plants,” he said.

Venter emphasised that government intervention alone was not enough, and other areas which presented a long-term solution needed to be explored to salvage the plants and protect thousands of jobs.

“We also cannot rely solely on government intervention because if it helps at all, it will only be of value in the short term. AMSA must be transparent about its future plans.

“Solidarity and its members are taking the matter very seriously and we are not going to sit around and wait for 3500 jobs to be neutralised,” he said.

This development comes after the ArcelorMittal announced that it intended to close its long-steel plants in Vereeniging and Newcastle by the end of the month, following a year of unsuccessful and inconclusive discussions with the government.

Economic commentators have said that the abrupt shutdown for ArcelorMittal dealt a significant blow to South Africa’s automotive manufacturing sector, which relied heavily on the steel supplier.

The National Association of Automotive Component and Allied Manufactures (NAACAM) asserted that that AMSA’s departure would have far-reaching consequences, impacting the entire automotive value chain and affiliated downstream industries, ultimately threatening the competitiveness of South Africa’s domestic automotive sector.

“The automotive industry is a significant contributor of South Africa’s GDP and export revenues, with vehicles and components accounting for approximately 15% of total exports. Therefore, any erosion of the industry’s cost competitiveness would severely impair its global market viability,” said NAACAM.

According to Trade, Industry and Competition Minister Perks Tau, the government held a meeting with the Mittal family, the primary shareholders of ArcelorMittal, on the margins of the World Economic Forum in Davos, Switzerland.

“We have met with the Mittal family, chairman of ArcelorMittal, the three ministers, Minister of DTIC, Minister of Finance, Minister of Electricity and we have had a discussion and said how do we begin solving the problems that we have particularly in Vereeniging and Newcastle.

“How do we avert what could be a job blood bath, we are working around solutions. The president also met Mr Mittal, they have accelerated the discussion to find the solution sooner rather than later,” he said.

Talks between unions and AMSA management will resume next week, with updates expected on President Cyril Ramaphosa’s discussion with Lakshmi Mittal, ArcelorMittal’s executive chairman.

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South Africa’s trade minister said his country is pursuing more robust trade and investment ties within the continent and with China – its biggest trade partner – as the global trade environment becomes increasingly fraught.

Parks Tau said that while he has had extensive and positive engagements with leaders in the United States, and collaborative relationships with Europe, South Africa is keen to develop more trade within Africa.

Trade globally, he said, was becoming increasingly complicated as the U.S. and China impose tariffs on each other, while Europe has added carbon import taxes.

“There’s almost an undeclared trade war,” he told Reuters after attending the FT Africa summit in London. “It has a direct impact on us.”

Concerns have risen among global finance leaders that if Donald Trump were to win next week’s U.S. presidential election it could mark the start of a fresh tit-for-tat global trade war.

Trump has vowed to slap a 10% tariff on imports from all countries, and 60% duties on imports from China, which would hit supply chains throughout the world.

Tau said more countries are acting unilaterally on trade measures, making it imperative that African nations take advantage of the African Continental Free Trade Area (AfCFTA) to boost their integration – and power on the global stage.

“It’s rather a way of leveraging our collective strength. We think there is great opportunity with the free trade area… Africa will grow,” he said.

The AfCFTA, which entered into force in 2019, aims to bring together 1.3 billion people in a $3.4 trillion economic bloc.

Tau cited a need to leverage the continent’s critical minerals capacity – and work together to not just export raw materials but also create more value at home.

He also cited South Africa’s ability to export more white goods, steel and mining sector equipment to other African countries, as well as its services and business processes.

“Many of those mines will complement one another,” he said.

He declined to specify which minerals could be processed within the continent, and said ministers are meeting next week to formulate specific strategies.

Tau also said they are looking to boost exports to China – namely of beef and manufactured goods – and that more Chinese investment in South Africa’s automotive industry is also possible. A delegation from China would visit South Africa next week, he said.

He also said that the government is working on proposals to help foreign-owned companies comply with Black empowerment laws.

While a bid from Elon Musk’s Starlink to operate in the country is with regulators, he said, the government recognised that rules requiring a 30% equity ownership by historically disadvantaged groups was challenging to a variety of foreign investors, and that they are considering proposals to tweak it.

Reuters

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A train that travels from rural northern Morocco to a port on the Mediterranean Sea carries no passengers. Three times a day, it brings hundreds of cars stacked bumper to bumper from a Renault factory outside Tangiers to vessels that transport them to European dealerships.

Business incentives and investing in infrastructure like the freight railway line have allowed Morocco to grow its automotive industry from virtually non-existent to Africa’s largest in less than two decades. The North African kingdom supplies more cars to Europe than China, India or Japan, and has the capacity to produce 700,000 vehicles a year.

Moroccan officials are determined to maintain the country’s role as a car-making juggernaut by competing for electric vehicle projects. But whether one of Africa’s few industrialization success stories can stay competitive as worldwide auto production transitions to EVs and increasingly relies on automation remains to be seen.

More than 250 companies that manufacture cars or their components currently operate in Morocco, where the auto industry now accounts for 22% of gross domestic product and $14 billion in exports. French automaker Renault, the country’s largest private employer, calls Morocco “Sandero-land” because it produces nearly all of its subcompact Dacia Sanderos there.

Unencumbered by many of democracy’s checks and balances, the government tells companies looking to outsource production to cheaper locales they can get approval for new factories and complete construction in as little as five months.

“We didn’t export one car 15 years ago. Now it’s the first exporting sector in the country,” Minister of Industry and Trade Ryad Mezzour said in an interview with The Associated Press.

Mezzour said Morocco has distinguished itself from other outsourcing destinations by expanding its ports, free trade zones and highways. The government offered subsidies of up to 35% for manufacturers to put factories in the rural hinterlands outside of Tangiers, where Renault now produces Clios as well as Dacia Sanderos, Europe’s most popular passenger vehicle, and soon plans to start manufacturing hybrid Dacia Joggers.

Chinese, Japanese, American and Korean factories make seats, engines, shock absorbers and wheels at the Tangiers Automotive City, a large campus of car parts manufacturers. Stellantis produces Peugeots, Opels and Fiats at its plant in Kenitra.

Devoting immense resources to developing and maintaining an automotive sector that could employ a young and growing workforce was part of a 2014 industrialization plan. To create jobs, Mezzour said that he and his predecessors have focused on offering more than cheap labor to foreign automakers looking for new places to build cars and produce parts.

Major automakers pay unionized factory workers less in Morocco than they do in Europe. But even with salaries one-fourth the size of France’s 1,766.92-euro ($1911.97) monthly minimum wage, the jobs pay more than the median income in Morocco. The industry employs 220,000 — a small but sizable chunk of the more than 200,000 agricultural jobs the country is losing annually amid a six-year drought.

Like in many African countries, Morocco’s domestic market for new cars is small. Less than 162,000 vehicles were sold there last year. The government’s success in building an automotive industry nevertheless has made cars the tip of the spear as Morocco works to transform its largely agrarian economy.

“I have one simple priority — not exports or being competitive. My job is to create jobs,” Mezzour said.

Abdelmonim Amachraa, a Moroccan supply chain expert, said the spending on infrastructure and training skilled workers puts the industry in a good position to lure investment from automakers looking to build out their electric vehicle supply chains.

Moroccan officials have sought investment from both East and West, trying to lure industry players from China, Europe and the United States as they now race to produce affordable electric vehicles at scale. China’s BYD — the world’s largest electric vehicle maker — has at least twice announced plans to build factories in the country that have stalled before starting.

“The important question is what can a small country do in this world,” Amachraa said, noting how rapidly global car manufacturing was changing. “We have this ability to coexist with Europe, Africa and the United States when a link can’t be found between China and the United States.”

As Europe works to phase out combustion engines over the next decade, automakers like Renault are preparing to adapt in Morocco. Mohamed Bachiri, the director of the Renault Group’s operations in the country, said the company’s record of success in Morocco makes it an attractive destination for others to invest, particularly in EVs.

He said the industry is likely to continue growing because Morocco’s “integration rate” — the percentage of parts that carmakers can source domestically — has steadily risen to more than 65%. The country also has a competitive advantage by having the experienced and skilled autoworkers that some other outsourcing destinations lack, Bachiri said.

“We’re predisposed to manufacturing cars for customers in our sphere. And the day they decide they need electric vehicles, we will,” he said.

The government has bankrolled public-private partnerships like a Renault-managed academy to train technicians and managers. Compared to comparable markets, Morocco’s political climate and proximity to Europe made it a safe investment, Bachiri said.

“It’s like being on an island next door,” he said, noting instability in neighboring countries throughout North and West Africa.

However, as the United States and European countries encourage their automakers to “onshore” electric vehicle production, it’s unclear how Morocco will fare. The country has long prided itself on being a free market that eschews tariffs and trade barriers but finds itself squeezed as countries vying for EV production advantages enact policies to protect their domestic automotive industries.

Western governments that have long pushed developing countries to embrace free trade are now enacting policies to boost their own EV production. France and the United States both passed tax credits and incentives last year for consumers who buy electric vehicles manufactured in Europe or North America, respectively.

Though the U.S. incentives can extend to Morocco because the countries share a free trade agreement, Mezzour said they complicated the global supply chain and sometimes made his job more complicated.

“We’re living in some kind of new age of protectionism,” Mezzour said. “We’re living in instability in terms of trade rules that makes it more difficult for countries like Morocco that invested heavily in open, free and fair trade.”

AP

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