About 400 Nissan SA employees — a quarter of the workforce — may lose their jobs as the Japanese-owned motor company struggles to find a new vehicle to build at its assembly plant in Rosslyn, Tshwane.
It says it has begun formal negotiations with employees and unions to “minimise the impact on our people” after the collapse of plans to build a new, small bakkie from 2024.
The new vehicle would have been a direct replacement for the NP200 bakkie, which will be discontinued in March 2024.
Rosslyn is the only Nissan plant in the world still building the vehicle. It was to have shared production of the new model with a plant in Russia but because of the Ukraine war, which has caused most global motor companies to mothball or sell their Russian operations, the project has been scrapped.
Export orders
The NP200 is one of two vehicle ranges manufactured at Rosslyn. The other is the Navara full-sized bakkie. The two products are built in similar volumes, meaning Rosslyn could potentially lose half its production after March.
However, Ramy Mohareb, communications head for Nissan Africa, says this is unlikely because the plant is winning more Navara export orders from the rest of Africa.
Nissan SA last week announced the renewal of a distribution agreement in Algeria. According to Maciej Klenkiewicz, Nissan SA and independent markets Africa country director: “We have ambitious plans for the Algerian market and specifically with the locally built Nissan Navara.”
Libya and Egypt are among other targets, adding to several countries already receiving Rosslyn-built Navaras.
The NP200 is aimed almost exclusively at the domestic market. Rosslyn began Navara production in 2021 after a R3bn investment made almost exclusively with African exports in mind — unlike most other SA bakkie producers, like Toyota and Ford, which send many of their vehicles to Europe and other markets.
Given the slow growth of new-vehicle sales across the African continent, Navara export volumes have struggled to accelerate. In the first nine months of 2023, figures from industry association Naamsa show that exports totalled 3,546. That’s fewer than half the number of Ranger bakkies that Ford sometimes exports to its worldwide markets in one month.
In the longer term, Navara exports could increase substantially if Africa’s nascent free-trade area agreement takes hold as intended, opening the way for the creation of a pan-African motor industry and a quadrupling of the continent’s new-vehicle market, which at present is 1-million a year.
When the R3bn Rosslyn investment was made, there was talk of combined annual capacity for the Navara and NP200 of 70,000. Thanks to Covid and general market conditions, Mohareb says capacity is 45,000, though actual production is much less.
That is why, with the coming loss of the NP200 model, Nissan SA says: “Until our future plans are confirmed, the business will be operating at reduced production volumes and needs to act responsibly to maintain its long-term competitiveness and be ready to secure future opportunities.”
Mohareb says an alternative small bakkie is under consideration for Rosslyn but it could be three or four years before it is ready for local production. As the only small bakkie still produced in SA, the NP200 has a firm grip on the market sector. By the time its successor appears, Toyota and Volkswagen are among the manufacturers that plan to have competing products in place.
The plant and its 1,600-strong workforce have previously built cars for Renault, Nissan’s international alliance partner, but Mohareb says there are no plans for that now.
Incentives
The loss of volume will have another effect. Under the government’s 2021-2035 Automotive Production and Development Programme, assembly plants must build at least 50,000 vehicles annually to access its full range of investment and production incentives.
Already well below the minimum threshold, Nissan must prepare for an even lower share of incentive income. That affects not just the company but also its component suppliers.
The “expectation” is for 400 job losses at Rosslyn.
The company says: “During the consultation phase we will work with our employees, their representatives and our partners to minimise the impact on our people and investigate other opportunities for them and for the business to ensure a sustainable future for the brand in SA.”
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