“No issues”

Floris Steenkamp

An alleged antagonism by some South African agencies over Namibia’s recent entry into the vehicle assembly market has been described this week as early perceptions at a time when there was not much information available. As information emerged eventually, it turned out that the South Africans in actual fact welcome Namibia into the ranks as a vehicle producing country within the Southern African Customs Union (SACU) and also the broader SADC.

An N$190 million vehicle assembly plant for semi-knocked down (SKD) Peugeot and Opel fabricates recently opened its doors in Walvis Bay. The plant, known as Peugeot-Opel Assembly Namibia (POAN) is operated by French automaker Groupe PSA and has a production target of 5 000 vehicles per annum by 2020. The vehicles are exported to South Africa from where it is distributed to dealerships in Namibia, Botswana, South Africa itself, Lesotho and Swazi-land. As the market evolves, Peugeot and Opel plans to enlarge its market footprint into the remainder of Southern Africa.

The Chairman of South Africa’s National Association of Automobile Manufacturers (Naamsa), Nico Vermeulen, yesterday in a telephonic interview with Namib Times said the South African vehicle manufacturing industry “has no tensions” with Namibia’s entry into the market. It is legitimate and conforms to all requirements as player in the market for semi-knocked down vehicles. Neither are there tensions to be observed from the side of the South African Department of Trade and the South African customs authority.
An article that appeared in the mentioned South African publication was not entirely correct, Vermeulen explained. “We only had snippets of information”, explained Vermeulen. Adding in the meantime things were put into perspective and that in actual fact a second launch will be hosted by POAN at a later stage that would incorporate the South African media as well. Vermeulen also said contrary to what the article stated, he could not detect any animosity from any South African stakeholder over the establishment of the factory.
Vermeulen explained POAN imports 55 components from which the semi-knocked down vehicle is assembled into a fully functional vehicle. “That meets the requirement of a semi-knocked down assembly facility and no South African counterpart finds any fault with that”, explained Vermeulen.
He estimated POAN to pay around 3,5 % import duties on these components. Namibia’s membership to SACU also means no import tariffs are levied upon the import of the vehicles from Namibia to South Africa.
“Had Peugeot imported fully completed vehicles from the European Union into Namibia, the import duties would have been 18 %”, further explained Vermeulen. Not only is this financially more viable for Peugeot-Opel in the long run, but for Namibia it holds the multiplying effect on job creation (one job created the auto making sector supports five new jobs downstream). Secondly support industries and support services evolve around such auto making sector (backward and forward linkages).
Note: it turned out from the information supplied by Vermeulen, Namibia’s evolutionary development in the auto making sector is in for a highly capital-intensive exercise should the country want to venture into the Completely Disassembled Vehicle (CDV) sector. In this instance a car has to be built from scratch. According to Vermeulen such a plant could cost as many as one million US Dollar and requires a large pool of skilled labour. Then there are also the economies of scale. A CDV factory is only viable if 100 000 or more vehicles can be built there per year.