Ford to spend R15-billion in biggest-ever South Africa investment

Ford will plough US$1.05-billion (R15.7-billion) into a plant in South Africa — its biggest-ever investment in the country — as the car maker scales back in other regions including Brazil and Europe.

The upgrades to the Silverton plant near Pretoria will boost the site’s annual capacity by almost a fifth to 200 000 units and create about 1 200 direct jobs, the company said in a statement on Tuesday. The outlay will support production of a new Ranger bakkie starting in 2022, both for domestic sales and exports.

The move comes after Ford said last month it will cease production in Brazil after a century of building cars there, closing three factories and cutting 5 000 workers. The Dearborn, Michigan-based company has also eliminated thousands of positions in Europe as part of a sweeping, $11-billion global reorganisation, and culled about 1 400 salaried employees in the US in 2020.

Ford’s fresh investment and jobs will come as a welcome boost to South Africa, where almost a third of the workforce is unemployed. The country has been hit hard by the coronavirus pandemic, with lockdowns and a resurgence of infections weighing on activity, and 2020 economic output probably contracted the most in at least nine decades.

Yet the auto industry has been one of the country’s success stories, with international car makers including Toyota, Volkswagen and BMW operating plants in the country. The companies benefit from a manufacturing incentive plan that runs until 2035, and Nissan and Daimler’s Mercedes-Benz are among those to have announced additional local investment in recent years.

Ranger

The Ford Ranger was among the top three light commercial vehicles sold in South Africa last year, while almost 46 000 locally produced models were exported around the world. That made the vehicle one of the top two most shipped from the country.

Production at the Silverton plant, which also makes the Everest SUV, will include VW bakkies as part of strategic alliance between the car makers. The partnership agreement was signed in June, almost two years after it was first announced, and was eventually expanded to include electric and self-driving cars.

Ford said Silverton will operate entirely off the grid by 2024, protecting it from South Africa’s regular power outages.  — Reported by Prinesha Naidoo, (c) 2021 Bloomberg LP