South Africa’s seven light vehicle manufacturers plan to launch a R3.5-billion venture fund this year, aimed at boosting black economic empowerment in the domestic automotive manufacturing industry.
BMW Group South Africa (BMW SA) and sub-Saharan AfricaCEO Tim Abbott said in Pretoria on Friday that the seven manufacturers were not in a position to surrender any percentage of ownership to South African investors, black or white.
The venture fund was an attempt to address government’s push for increased empowerment in the local automotiveindustry, especially as the Department of Trade and Industry (DTI) was expected to announce a new government support programme for the automotive industry later this year.
Abbott said current planning was for the venture fund to have a black fund manager, with the vehicle manufacturers and government working alongside this manager to select projects to benefit from the fund.
Benefits could include funding and/or mentoring.
He noted that the fund still required a number of approvals, such as legal buy-in from all the manufacturers’ parent companies.
“From there we’ll go to the DTI to present our plan.”
Abbott said the fund was not part of government’s new incentive plan, the Automotive Masterplan, set to replace the current Automotive Production and Development Programme. It did, however, compliment the masterplan.
“We [BMW] already have the sign-off from the BMW head office in Germany,” he added.
Around 96% of production will be exported.
The R6-billion investment to produce the new X3 pushed up capacity at the plant to 76 000 units, which is a new record for the Rosslyn facility.