Nissan's struggles open door for Chinese carmakers in SA

TimesLIVE

a day ago

Chery SA CEO Tony Liu said the Chinese automaker is exploring all available avenues to establish its first production facility in the country.
Liu was responding to a question from TimesLIVE Motoring about whether an established plant, such as the Nissan Rosslyn operation whose future is under doubt, might be of interest.
News agency Reuters reported in May that Japanese manufacturer Nissan was considering global plant closures, potentially including shutting the doors of its Tshwane facility.
'SA boasts a proud legacy of local vehicle manufacturing, and Chery is committed to strengthening the industry for generations to come. This would also allow us to enhance our contribution to local communities,' he said.
According to Liu, the brand's outlook features two potential pathways: partnering with an existing manufacturer to 'help address current production gaps' or set up its own, dedicated manufacturing plant, realising the 'full production capabilities' of Chery.
The CEO said the manufacturer's customer base, which grew to 55,000 over the three years since market re-entry, represents critical mass that has justified a feasibility study to assess how local manufacturing could support its long-term volume aspirations.
'Beyond market size, SA being the largest new car market in Sub-Saharan Africa, Chery recognises SA's role as a gateway into Africa through initiatives such as the African Continental Free Trade Agreement.'
Liu said local manufacturing would also enable contribution to the domestic supply chain, with commitment to broad-based black Economic empowerment requirements.
Meanwhile, Nissan SA representatives have countered the notion that the Rosslyn plant is on borrowed time.
'Nissan wants to clarify the news is not based on any official information of the company,' said head of communications Ramy Mohareb.
'At this stage we are not able to inform you which plants will be affected. Our focus remains on our operations and the dedicated workforce that drives our success,' he told TimesLIVE Motoring.
The Rosslyn plant employs 1,080 people and has been operational since 1966.
Mohareb was unable to comment on the facility's output, or elaborate on plans to sustain its business and protect local jobs and retailers.
In 2024 the brand's top-selling NP200 half-tonne bakkie, produced at Rosslyn, was discontinued. The plant only produces the one-tonne Navara.
A well-placed industry insider, speaking on condition of anonymity, expressed the view that Nissan SA, in its present guise, would struggle to find longevity.
'The key to being a successful manufacturer in SA is sufficient export volume, which Nissan never had. The best-selling SA cars and light commercial vehicles only manage about 25,000 units per year, insufficient for competitive manufacturing. This needs to be complemented with a proper export programme to reach a viable volume,' the source said.
'Toyota, BMW, Mercedes-Benz, Volkswagen and Ford have the programmes but Nissan, with a few thousand Navara exports into Africa, aren't close. Getting there is a parent company decision. The SA factory needs to be part of the global supply chain, not a local market factory with a handful of exports to small regional markets.'
According to the insider, the peak of Nissan SA's sales dates as far back as the period of 1976 to 1978 when it was the leading manufacturer in SA.
'Its most successful models included the original Datsun 1200s and the B120/140 bakkie, the original Datsun 1600s and the Skylines. The first Maxima and Primera were great cars but not quite the sellers they should have been. On the bakkie side, the Hardbody took the fight to the Hilux, but this faded as the last Hardbody's life was extended, ultimately a life of more than 20 years.'
'In my view, Nissan's product offering didn't keep up with the changing demands of the SA buyer. As the market evolved, moving from sedans to SUVs and crossovers, Nissan's range reduced significantly and the individual products were less competitive within their respective segments.'
Mikel Mabasa, CEO of Naamsa, the national automotive business council, said the organisation was waiting for Nissan SA to provide an outline of its local plans.
He said Naamsa was concerned by media reports casting doubt over the brand's future in SA.
'Any [possible] closure is not something we take lightly. We have a lot of people employed through such plants, not only those on the production line, but the value chain, including those who support the plant with components. If Nissan decides to discontinue operations, we will activate discussions with them directly, understanding their position and identifying how we can support the future of the facility,' Mabasa said.
'Naamsa will be at the forefront in working with partners to see what can be done to safeguard the plant for future operations,' he said, referencing the 2017 disinvestment of General Motors, where similar conversations were had.
'Isuzu was able to raise their hand and the Gqeberha plant was saved.'
Separately, Mabasa confirmed Naamsa had been in discussions with brands who are importers, eyeing SA as a destination for manufacturing operations.
He said Naamsa welcomed intentions for new operations by brands, whether it involves repurposing existing plants or establishing a greenfield investment from the ground up.
Spokesperson for the department of trade, industry and competition, Bongani Lukhele, said Nissan had not provided formal communications on the issue, and the department was therefore not in a position to respond to queries.