DAVID FURLONGER: Whitfield’s stellar vision for Stellantis

Whatever its faults – and there are many – this country remains the premium automotive investment destination in Africa, says Stellantis South Africa MD Mike Whitfield. 

Whitfield, who has spent almost his entire working life at Nissan, running operations in South Africa, Scandinavia and Egypt, and assuming overall responsibility for African activities, recently switched sides to Stellantis after it announced plans to build a R3bn vehicle assembly plant at Coega, near Gqeberha in the Eastern Cape. 

The plant will build Peugeot’s Landtrek bakkie, with production due to start in 2026. The first phase will take annual production to 50,000, rising later to 90,000. Whitfield says 40% of production will be sold in South Africa and 60% exported, mainly to the rest of Africa. 

Stellantis South Africa’s France-based parent company owns several brands besides Peugeot. In South Africa, they include Citroën, Opel, Fiat, Alfa Romeo and Jeep. All products are being imported at present. 

While Whitfield explores his new surroundings, his former company, Nissan South Africa, is in hot water. Last week it announced that it may have to retrench up to 25% of employees at its Rosslyn vehicle assembly plant in Tshwane. 

The plant has failed to find a replacement for its NP200 small bakkie, which will go out of production next March. A planned successor, which would also have been built in Russia, has been scrapped after that country’s invasion of Ukraine persuaded Nissan and its international alliance partner Renault to leave Russia. 

The NP200 accounts for about 50% of Rosslyn production, alongside the bigger Navara bakkie. Though the company says another small bakkie is likely to be built eventually at Rosslyn, that could be three or four years away. Until then, Navara will have to soldier on alone on production lines already operating at well below capacity. Short-term potential growth in African exports won’t come close to fixing that.  

Hence the decision to lay off employees. Rosslyn now employs about 1,600 people. While trying to minimise the impact, Nissan says urgent action is necessary “to ensure a sustainable future for the brand in South Africa”. 

Not surprisingly, given his new responsibilities, Whitfield is bullish about the automotive investment environment in this country. “If you want to make it in Africa, you have to have a base in South Africa,” he says. Morocco, the only other African country with a comparable motor industry, exports most of its vehicles to Europe. 

One of South Africa’s biggest advantages is the long-term consistency of automotive policy, he adds. Foreign motor companies know exactly what they are coming into and can invest with confidence. 

Several of his peers at other companies would beg to differ. Government’s reluctance to announce a clear policy for the local manufacture and sale of electric vehicles (EV) is, frankly, sending them mad. A policy white paper was promised before the end of 2021. After several false alarms, the industry is still waiting. Now it has been told that finance minister Enoch Godongwana may put it out of its misery in his midterm budget speech on November 1. 

After a recent series of individual meetings with Godongwana and trade, industry & competition minister Ebrahim Patel, industry executives hope the time for clarity really has arrived. But, as in the case of the boy who cried wolf, government’s previous unfulfilled hints of policy action encourage doubt. 

This week, Ford Africa president Neale Hill, BMW South Africa CEO Peter van Binsbergen, Toyota South Africa Motors president Andrew Kirby, Isuzu South Africa CEO Billy Tom and Volkswagen South Africa MD Martina Biene all said the time for EV policy procrastination is over. If multinational parent companies do not get clarity, they will take their investments elsewhere. 

More than two-thirds of South Africa-built vehicles are exported, predominantly to countries planning to ban the sale of vehicles in the near future that have petrol and diesel internal combustion engines (ICE). Almost all the vehicles made here have ICEs. Though plans to expand the African market - where ICE technology will continue to rule for years to come - may take up some of the export slack,  South Africa needs a clear EV strategy to encourage a transition. 

Motor companies have given up hope of persuading the government to include buyer incentives in any EV policy – ministers say the country can’t afford them – so the only question is what production and manufacturing incentives will be offered. As a show of faith, says Hill, government should stop penalising EVs. ICE cars imported from Europe carry an 18% import duty. Those with engines smaller than 1l carry zero duty. An EV of any size is taxed 25%. 

“With the stroke of a pen, government can fix this and reduce the affordability gap between EV and ICE,” Hill says. “It would send a positive message to the industry and to consumers.”