Significant role for SA in Nissan’s new global strategy

South Africa has a significant role to play in Nissan Motor Company of Japan’s new strategy, including increasing the number of destinations to which the new Navara pickup is exported from Nissan South Africa’s manufacturing plant in Rosslyn in Pretoria.

Nissan Motor Company in May this year unveiled its new global four-year transformation plan to achieve sustainable growth, financial stability and profitability.

However, it was silent on its future strategy for Africa, including its Rosslyn plant, until Monday when it announced its four-year business plan for the Africa, Middle East and India (AMI) region.

Read: Nissan tight-lipped about strategy for Africa as it ‘transforms’

This followed Nissan in April last year announcing a R3 billion investment in its Rosslyn plant to prepare the facility for the production of the next generation Navara.

Shinkichi Izumi, managing director South Africa, said on Monday manufacturing is important to Nissan’s strategy and the intention is for South Africa to become a special utility vehicle (SUV) and light commercial vehicle hub for the region.

Izumi said they will be increasing domestic and export volumes from South Africa.

As a consequence, there will be a greater focus on cost efficiency and an acceleration of localisation driven by the locally produced Navara, while skills development of people will be a key strategy, he said.

Seven new models

Izumi added that Nissan is planning to introduce and launch seven new models into South Africa and sub-Saharan countries in the next two years.

However, he said that aligned to Nissan’s global strategy, the product portfolio will be streamlined to focus on two areas and result in the expansion of Nissan’s SUV and crossover offerings and the further strengthening of its solid light commercial vehicle base with the new locally produced Navara.

Izumi added that apart from Nissan’s mother plant in South Africa, it also has a semi-knocked-down (SKD) assembly plant in Nigeria with its local partner, the Stallion Group.

Read: VW, Nissan chase an African market where car loans are rare

“We are now looking for and studying further opportunities in Ghana and Kenya and are working closely with the African Association of Automotive Manufacturers on this,” he said.

Mike Whitfield, former Nissan South Africa and sub-Saharan Africa MD and now chair of Nissan Africa South and MD of Nissan Egypt, said the Africa Free Trade Agreement has been postponed by a year because of Covid-19 but automotive is a key section of the agreement.

Whitfield said there are only two auto manufacturing bases in Africa – in Morocco and South Africa – which means there is a big opportunity once the Africa Free Trade Agreement and the automotive aspect of it is concluded.

“This is definitely [a] work in progress,” he said.

‘Enormous potential’  in Africa

Guillaume Cartier, chairman of the AMI region for Nissan, said the region has enormous potential with some of the most dynamic and diverse automotive markets in the world.

“Nissan has already established a strong foundation for sustained growth with high brand equity, a deeply embedded heritage of Nissan DNA and culture and a long history of dedicated and experienced business partners in retail and manufacturing,” he said.

Cartier said AMI will follow the global transformation strategy announced in May by Nissan chief executive Makoto Uchida, which aims to achieve sustainable growth, financial stability and profitability by the end of fiscal-year 2023.

But Cartier said they wanted to achieve a higher market share in the region than for Nissan globally and also achieve an operating profit higher than 6% by 2023 in the AMI region.

“This is key to make sure we can reinvest in the future,” he said.

Read: Renault and Nissan rule out merger

Cartier said the AMI region is full of opportunities for significant growth because it is huge and comprises many countries, has a huge and young population, and in many countries vehicle ownership is low.

“That is something that we take as an opportunity and we need to transform into business.

“Over the next four years we will transform opportunity to reality by bringing the right products, services and technologies to deliver lasting positive change for the business, our partners and customers,” he said.

The Automotive Industry Development Centre (AIDC) said last month the expansion of South Africa’s automotive industry is central to the government’s economic development strategy but the Covid-19 crisis has forced car makers into survival mode and “could push ambitious growth plans out of reach”.

The AIDC is expecting a 20-30% decline in vehicle sales this year, with AIDC CEO Lance Schultz anticipating that it will take between two and five years for the industry to return to normal.