Eastern Cape bags Asian car deal. Fin24

The East London Industrial Development Zone (IDZ) has announced plans to build a R4bn automotive assembly plant. The plant's facilities will be shared by a number of Asian car companies.
This means the Eastern Cape will become an outsourcing destination for the assembly of motor vehicles for South-East Asia, including China, Korea and India. The IDZ is conducting the planning stages of the project, but it could be operational as early as 2011. The plant is to be funded partly by government and partly by private investment.

The plant will initially focus on the assembly of passenger vehicles. The IDZ said there is a possibility of expanding to the assembly of commercial vehicles at a later stage. "The East sees Africa as a stepping stone to the rest of the world," said Corrie Kotze from AIH Consulting, which is assisting with the project. "We know they want to build plants in Africa. So, we are going to get them to come here with this project," he said.

If an assembly plant is to be economically viable, it must fabricate a minimum number of vehicles each year. The emerging South-East Asian car makers are unlikely to reach these volume requirements within the next few years. Therefore, the proposed production facility will allow companies wanting to invest in South Africa to share facilities, infrastructure and logistics services.
"Clustering is the way forward for them. It will help them reach a critical mass of 50 000 units a year collectively," said Kotze.
"We are taking all the big investment out for the newcomers. They will essentially rent our facilities," he added.
The motor manufacturers will be importing most of the car parts for their locally assembled vehicles into South Africa. However, IDZ CEO Simphiwe Kandlo said there will be initiatives to increase the amount of locally made components in these cars.
"The obvious idea is to start localisation. But first we will focus on getting the assembly and get job creation going," said Kotze.
After the cars are put together, the majority will be exported to the USA, Europe and the rest of Africa.
IDZ executive manager of business development Tembela Zweni said the East London IDZ is the "ideal location" for the plant, because it already operates a 16 -hectare automotive supplier park on its premises. These suppliers will, at a later stage, be able to supply some components to the assembly plant.
He added that the IDZ is 6km away from the East London's river port.

this is a very exiting devoelodment for us in the Automotive sector as will the job stability issues this will bring new reliefe to a crouded automotive workforce market...