Ford to spend $1 billion to upgrade South Africa operations
The U.S. automaker said on Tuesday that Ford Motor company would invest $1.05 billion in its South African manufacturing operations, including improvements to increase production of its Ranger pickup truck.
The investments are aimed at increasing Ford’s installed capacity from 168,000 to 200,000 vehicles in South Africa, said Andrea Cavallaro, operations director of the International Business Group of Ford.
“It’s the biggest investment in Ford’s 97-year history in South Africa and one of the largest ever in the local automotive industry,” he told an announcement event.
In ramping up production in Africa, Ford joins global carmakers like Volkswagen, Toyota and Nissan, seen by the industry as a wide, untapped market for new car sales.
In South Africa and other sub-Saharan African countries, about a third of Ford’s local output is sold, with the rest exported elsewhere.
At its plant in Silverton, a suburb of the administrative capital Pretoria, Ford’s South African investment includes $683 million for infrastructure improvements and new facilities and $365 million to improve tooling at major supplier factories.
As part of the Ford-VW partnership, the plant will also produce Volkswagen pickup trucks.
The increased production would generate 1,200 Ford jobs in South Africa, expanding the local workforce to 5,500 workers, while creating an estimated 10,000 new jobs across the supply network of the carmaker.
By 2024, Cavallaro said, Ford also intends to make the Silverton plant fully energy self-sufficient and carbon neutral.
For its automotive industry, South Africa has great ambitions, placing it at the center of efforts to revive economic growth and reduce unemployment by industrialization.
South African President Cyril Ramaphosa, speaking at the Ford announcement, said the company had already helped introduce 12 suppliers of automotive components to the region.
He said, “Ford Motor Company is like a beautiful flower and it has attracted all these wonderful bees that keep coming here”.
The government’s plan aims to more than double the annual output of the industry to 1.4 million vehicles by 2035 and raise the proportion of locally manufactured auto components from 39 percent to 60 percent, backed by investment and tax incentives.
The targets were dealt a blow by the COVID-19 pandemic, but last year, both local sales and exports were down by about 30 percent.