BMW SA is tooling up to built an as-yet unnamed model for export, but managing director Ian Robertson is concerned that the strong rand and cost-parity pricing for raw material such as steel could undermine the success of manufacturers’ export drives.
BMW SA is tooling up to built an as-yet unnamed model for export, but managing director Ian Robertson is concerned that the strong rand and cost-parity pricing for material such as steel could undermine the success of manufacturers’ export drives.
Robertson, who is also the president of Naamsa, warned yesterday that South Africa may be becoming less competitive due to the recent strengthening of the rand and dollar-based pricing for many locally produced inputs from plastic to steel and aluminium.
BMW SA had been awarded the rights to build a new model for the export market “against competition from around the world", Robertson was quoted as saying.
However, he added that a number of suppliers of raw material to the SA automotive industry had been increasing their prices "substantially", and in so doing eroded the competitive advantage local manufacturers enjoyed under the Motor Industry Development Plan: “The advantage of manufacturing in SA is taken away when you price in dollars".
Robertson said the stronger rand affected SA's attractiveness as an exporter, but he said most economists predicted there would be a correction in the local currency and he would not be surprised if the rand was trading at about 10 to the euro and to the dollar by year end.
CARtoday.com reported in January that meetings were to have been held between representatives of Iscor, Naamsa and the National Association of Automotive Component and Allied Manufacturers (Naacam) over the price at which the steel supplier would supply material to the SA automotive manufacturing industry.
Iscor's corporate affairs executive, Phaldie Kalam, told that negotiations with the automotive industry "were still underway". He said that in terms of the company's international parity pricing policy, steel prices in the domestic market continued to be among the lowest in the world.
Meanwhile, Robertson said that BMW was actively considering moving its export vehicles through Mozambique (once SA’s neighbouring country’s infrastructure had been upgraded), instead of sending them south to SA ports.
"We are seriously looking at using Mozambique in 2004," he said.
Original article from Car