Ford to invest billions more in SA

The Ford Motor Company is investing R5.2 billion in its Silverton assembly plant for the production of the first-ever Ranger plug-in hybrid electric vehicle (PHEV) and has a goal of becoming entirely energy self-sufficient by 2025.

It has also announced a significant new model offensive on the South African market, with nine new models to be launched into the domestic market in the next 18 months.

Ford Motor Company Africa president Neale Hill said on Wednesday that production of the Ranger (PHEV) at the Silverton plant will commence in late 2024.

Speaking at an event to celebrate Ford’s 100 years in South Africa, Hill confirmed the latest investment will create some new jobs within the company but was not prepared at this stage to disclose how many.

The company currently has about 5 200 employees in South Africa, with its local operations supporting about 60 000 jobs in the total value chain.

R33bn invested in 14 years

Andrea Cavallaro, operations director for Ford International Markets Group, said the additional investment in the Silverton assembly plant takes the company’s total manufacturing investment in South Africa over the past 14 years to about R33 billion.

“It signals our commitment to the country, our employees and our extensive supplier network,” he said.

Cavallaro said the Ranger PHEV, as with the current Ranger models, will be exported to Europe as part of Ford’s commitment to offer a wide range of powertrain options for customers in this important mid-size pickup segment.

“For the first time in about two decades, the Silverton plant will also be supplying vehicles to Australia and New Zealand, as it will be the source market for the Ranger Plug-in Hybrid for these countries,” he said.

Hill said the decision to invest in South Africa for the production of the Ranger PHEV was taken because “the reality is that we can’t wait”.

“We have got customers and there are demands in other parts of the world and we need to move forward.

“We prefer to do it with [policy] clarity, but at the same time, we are not going to miss out on opportunities like this and we will continue to engage [with government] and look for solutions,” he said.

Hill said the biggest risk from the government policy vacuum is missing out on deepening localisation and the benefits the supply base will get from the transition to new energy vehicles (NEVs).

“That is something we are very concerned about and that is why we continue to engage very aggressively and very actively with the government,” he said.

Vote of confidence

Mikel Mabasa, CEO of automotive business council Naamsa, welcomed Ford’s new investment in South Africa.

Mabasa said it is a continuation of the vote of confidence the automotive industry has in the South African market and the intention to preserve the country’s manufacturing capabilities to be able to produce vehicles in the future.

“The fact that all our global principals are allowing our local manufacturers the space to be able to make these investments is very encouraging, and I want to call on government to do the right thing and support this industry that has demonstrated its commitment to South Africa,” he said.

This is a reference to the long delay in the government announcing its policy for the industry’s transformation to NEVs.

Read:
No debate on the need to shift to electric vehicles – Patel [Oct 2022]
Auto sector gets insistent about policy certainty on new energy vehicles [Dec 2022]
Auto sector frustrated with government over electric vehicle transition policy [Apr 2023]
Auto sector wants government to take it more seriously [Jul 2023]
MTBPS: New energy vehicle policy announcement disappoints [Nov 2023]

Cavallaro said the Silverton plant now produces 720 vehicles a day, the highest of any original equipment manufacturer (OEM) in South Africa.

It only produced 10 vehicles a day when it first started production in South Africa in 1923.

He said the investment for the plug-in hybrid version of the Ranger incorporates a new battery pack assembly plant that is being constructed within the Silverton plant.

He said Ford’s chassis plant in the Tshwane Automotive Special Economic Zone is also being upgraded to accommodate the unique chassis configuration for this model, while the vehicle assembly operations are being adapted to accommodate the Ranger PHEV.

OEMs go electric

The production by the Silverton plant of the Ranger PHEV will make Ford Motor Company the fourth OEM in South Africa to commit to investments in NEVs.

The others are:

• Mercedes-Benz South Africa announced in January 2023 that it will be producing a C-Class PHEV at its East London plant following a R13 billion investment in the plant to produce the new C-Class.
• Toyota South Africa Motors announced an investment of R2.43 billion in 2019 to produce a new passenger vehicle at its plant in Prospecton in Durban. It confirmed in January 2021 that it will be manufacturing the new Corolla Cross, including for the first time a hybrid model.
• BMW announced in June 2023 that it will be investing R4.2 billion over five years to prepare its manufacturing plant in Rosslyn in Pretoria for the production of the next generation BMW X3 plug-in hybrid vehicle, with production expected to commence in 2024.

Nine new models coming

Hill said the nine new Ford models that will be launched into the South African market in the next 18 months will be the company’s next biggest product line-up refresh since it launched 10 new models in 2015.

Apart from the locally produced Ranger PHEV, the new models are the Mustang GT Fastback, Mustang Dark Horse, all-electric Mustang Mach-E, the new Territory sport utility vehicle (SUV), the next-generation Tourneo and Transit Custom, and two locally produced Ranger models, the Tremor and Platinum.

Hill said Ford’s market share in South Africa is currently tracking at just below 6%, and they are planning to grow it to 8% by 2025.

Read: Ford SA makes further multi-million rand investments in Silverton plant

Cavallaro said the Silverton plant will be the first Ford plant to become entirely energy self-sufficient.

Hill said the Silverton assembly plant and Struandale engine plant currently produce 13.5MW of electricity, which covers about 35% of their energy requirements.

“The intention is that we will add battery storage to that and additional technologies that will get us to 100% self-sufficiency,” he said.

Hill was only prepared to say it would cost “a lot” to get the plant to 100% self-sufficiency.

Ford also announced that, with its project partners, it has launched three major community initiatives focused on empowering youth in South Africa through education, which involves a total investment of R85 million.

These initiatives involve the creation of 100 mathematics and science laboratories for primary schools around the country, building 100 early childhood development centres, and funding 100 youth scholarships to promote learning in the fields of science, technology, engineering and mathematics.

Read:
Billions in automotive investment pouring into SA
Auto component companies to invest almost R5bn in SA

Listen to Jimmy Moyaha’s interview with Ford Motor Company Africa president Neale Hill in this SAfm Market Update podcast:

You can also listen to this podcast on iono.fm here.