`Made in Africa' puts BMW autos on firm ground

By Benita van Eyssen  /  DPA , JOHANNESBURG

Sun, May 08, 2005 - Page 12

German car manufacturer BMW launched its new 3 series range with a spectacular performance by acrobats from the world famous Cirque du Soleil in South Africa under the theme "faster, higher, stronger."

More than 600 people gathered to marvel at the latest release as it was lowered from the ceiling at the Dome in Randburg north of Johannesburg this week.

Organizers said they wanted the event to showcase the marriage between the world famous circus renowned for "pushing boundaries" and the fifth generation of the popular car.

BMW Group South Africa CEO, Wolfgang Stadler introduced the car that will bear the "Made in South Africa" label. Production began earlier this year at the company's Rosslyn Plant outside Pretoria -- the source of 55,555 BMW vehicles annually.

Nearly half of the Rosslyn output is shipped to the key US market. South Africa's exemption from duties under AGOA amounts to a saving of about US$750 per car, according to Stadler.

Japan, New Zealand and countries in the southern African region also receive the "Made in South Africa" version of the cars. About 50 per cent of each car's value, apart from the clutch, engine is produced locally.

Simultaneous production of the new 3 series began earlier this year at Rosslyn with its 3,000 strong workforce and BMW's German plants at Regensburg, Munich and Leipzig. Rosslyn is the, "most technologically advanced auto manufacturer in the southern Hemisphere," according to Stadler, and has earned its stripes within the BMW group.

It was voted "best European plant" in 2002 despite its location - far from where the BMW group began its business decades ago.

With the new series, about one-third of all new BMW 3 series will come out of South Africa, production was expected to expand to around 60,000 units per year -- 80 per cent of which will be exported -- in the coming years, Stadler told reporters.

BMW has invested two billion rand (US$337 million) in its South African operation since 2002 including a US$33.5 million paint shop and a US$30 million assembly facility. Rosslyn has the capacity to produce 250 units a day and provides, according to Stadler about 36,000 "downstream jobs."

Stadler is confident of doing business in South Africa, a country he describes as being "on the right track" and one where the black middle class "definitely like our cars".

But BMW has had to adopt a pragmatic approach in dealing with the drawbacks of a business environment with a skills shortage and an HIV/AIDS crisis.

About 10 per cent of its total wages is invested in training compared to the average 3 to 5 per cent in Japan, according to Stadler.

In 2001, BMW had to formulate an in-house HIV/AIDS education, treatment and management programme for the estimated 5.9 per cent of workers who are known to be infected with the disease.