South Africa was one of the key destinations for investment, Mike Whitfield, the CEO of Stellantis South Africa, said yesterday.
“If you want to capitalise on the future of Africa, you need to be in Africa, and you have to be in South Africa,” Whitfield told a media round table.
Stellantis South Africa is part of Stellantis, a multinational automotive company formed in 2021 by the merger of Fiat Chrysler and PSA Group and is the world's third largest auto manufacturer by sales.
Stellantis has well known brands such as Alfa Romeo, Chrysler, Citroën, Fiat, Jeep, Maserati, Opel, Peugeot, among others, and operates in 54 countries.
He said a lot of people had asked why their firm planned to build a plant in South Africa
This as Stellantis’ R3 billion assembly plant in the Coega Special Economic Zone, in the Eastern Cape, starts construction in roughly eight weeks time and “was on track”.
The start of assembly is scheduled for 2026.
He said there were a few fundamental reasons to investing in South Africa.
“One is it is still by a long way the biggest market in Africa. It's had a long period of a very stable policy. It's a very good policy because very few of us would ever invest in a market where there's uncertainty in terms of. That is very strong.
“And for us, going forward, I think the real focus is the last real frontier left in the oil industry is Africa. You have the African Continental Free Trade Area, which will happen. It will happen,” Whitfield said.
Whitfield was commenting at a time several firms have dis-invested in South Africa as the challenges to doing business have intensified amid logistic and energy constraints.
Shell this week confirmed that it was exiting its downstream operations. Shell’s exit from South Africa has raised alarm bells of further impending corporate departures from the country.
BHP’s bid for assets of Anglo American excluding its platinum group metals and iron ore operations could also pave the way for the Johannesburg and London-listed firm departing, while BNP Paribas has also put an end to its banking venture.
Talking about the plant, Whitfield said 65% of the cars produced at the plant would be for exporting, to Africa and the Middle East,
The plant in South Africa was Stellantis’s fourth in Africa. It had plants in Morocco, Nigeria, and Egypt.
“Ultimately, our objective is that 70% of what we sell in Africa comes out of Africa,” he said.
A key focus of the firm was to target “affordable mobility”. This as consumers are under financial pressure in a cost of living crisis that has seen new cars sales in South Africa decline.
With this in mind Stellantis South Africa is planning a pipeline of affordable cars.
Whitfield also said they had started the process of hiring people.
Employment at the plant will reach more than a 1 000 people, all of which were new jobs.
“And the commitment we have made with the government is we probably invest over half a million with the training hours in the next 12 months,” he said.
When asked by Business Report, around the problem of spare parts for some of the brands in South Africa, which was putting off people buying Stellantis’s brands, Whitfield said the parts of these brands under warranty would be available to South African motorists and they planned to regain South African’s trust.
He said the firm aimed to make spare parts affordable, available so that customers didn’t experience downtime and to ensure its vehicles had good residual values.
BUSINESS REPORT