Nissan’s potential disinvestment from SA would not only be an admission of failure in Africa’s biggest new-vehicle market but could also complicate the Japanese motor company’s long-held desire to turn the rest of Africa into a major market for its products.
As with other multinational motor companies, Nissan’s African expansion plans have been based on the assumption that SA, with its established vehicle and components manufacturing infrastructure and experience, would be the headquarters for pan-African development.
Indeed, its Ghana plant, the centre for West African expansion, assembles Nissan Navara bakkie kits manufactured at Nissan SA’s Rosslyn manufacturing plant in Tshwane.
Rosslyn has been identified as a potential casualty of the Japanese parent’s intention to shed 20,000 jobs worldwide and reduce its vehicle manufacturing sites from 17 to 10 over the next two years. Plants in India, Argentina and Mexico are among others rumoured to be at risk.
Nissan itself says: “Regarding the recent reports on the potential closure of certain plants, Nissan wants to clarify that this news is speculative and not based on any official information of the company.”
Ramy Mohareb, head of communications for Nissan Africa, told Business Day: “There have been different studies but they are not concluded.”
Nevertheless, there are pressing reasons why Rosslyn is being considered for closure. It has been operating for years at a fraction of its production capacity and there is little likelihood of this changing soon.
Sales and market share have plunged and the Nissan brand, already weak in an intensely competitive market, has become a major casualty of the Chinese invasion.
In 2019, in the presence of President Cyril Ramaphosa, Nissan SA’s then-MD, Mike Whitfield, announced that a R3bn Japanese investment in Rosslyn would allow the plant to almost double annual production from 35,000 to 65,000.
The plant would continue to build its long-standing large bakkie, the Hardbody, and its smaller sibling, the NP200. The extra 30,000 production would come from the latest, more sophisticated Navara bakkie range.
Exports into the rest of Africa would be a priority but Europe, where SA-made Toyota Hilux and Ford Ranger bakkies are big business, would also be a target.
This all happened nearly a decade after the company originally announced it was planned, suggesting that Nissan Japan had required much persuasion to go ahead.
Discontinued
After General Motors (GM) disinvested from SA at the end of 2017, Nissan, because of its perceived inactivity, was considered odds-on to be next. After the R3bn investment was finally announced, things quickly unravelled.
The following year, 2020, Covid-19 disrupted plans to import and install new manufacturing equipment from overseas. Navara was previously imported. The local model was originally slated to go on sale in 2020. This was put back to early 2021, then again to later in the year.
That same year, Nissan announced that the Hardbody would be discontinued, Having previously insisted that its basic engineering, proven reliability and price made it a favourite among customers in other African countries, the company decided it was too old to continue.
Then came the biggest blow of all. Nissan’s top-seller, the NP200, had the small-bakkie market all to itself after the disappearance of rivals from GM and Ford. Production of its replacement — a joint Nissan-Renault-Mitsubishi project — should have started in 2023.
However, the vehicle’s main production base was Russia, and when the partners quit that market in 2022 after Russia’s invasion of Ukraine, the Rosslyn project was canned.
Nissan SA MD Maciej Klenkiewicz later said his company had no say in the decision, which was influenced by “geopolitical” circumstances. The last NP200 vehicles were built in April 2024, since when 400 workers, about 25% of the previous workforce, have been laid off.
The plant now employs about 1,200 people. The National Union of Metalworkers of SA (Numsa) is naturally trying to learn what the future holds for its remaining members at Rosslyn, but predictably without much success so far.
Automotive components suppliers are also holding their breath. Renai Moothilal, CEO of the National Association of Automotive Component and Allied Manufacturers, points out that Nissan is one of only four local bakkie manufacturers (the others are Ford, Isuzu and Toyota).
He says: “That means the economies of scale, where there are multiple contracts, can be lost and this affects overall competitiveness. This is not great at a time when overall vehicle industry assembly volumes have not been met.
“Suppliers are already losing out because of reduced car exports to the US caused by President Donald Trump’s 25% tariff on imports.
“Cost containment and employment pressures are high with suppliers,” says Moothilal, adding, “Suppliers in SA are already under pressure daily, they definitely don’t need this (Nissan) possibility as well.”
The upshot of all Nissan’s production problems is that a plant intended to have a 75,000 capacity is now working at a tiny fraction of that. With its reduced workforce and shifts, Rosslyn now has a nominal capacity of 45,000.
In the first four months of this year, however, it built barely 5,000 Navaras — about 2,000 for local customers and just over 3,000 for export.
In 2024, the plant build about 20,000. That’s well below the 50,000 needed to access the full range of manufacturing and duty incentives available under government’s 2021-2035 automotive production and development programme.
New brands
The lower the production, the fewer the incentives. Adding to the pain is that, since the R3bn investment was announced, the SA market has been flooded with new bakkie brands.
Then, there were about half a dozen. Now there are more than 20, many of them low-priced Chinese. Whitfield, now MD of Stellantis SA, is acutely aware of the problem. Stellantis, whose local imported brands include Alfa Romeo, Citroën, Fiat, Jeep, Opel and Peugeot, is about to start construction of a vehicle assembly plant in the Eastern Cape.
Vehicle production, originally due to begin in early 2026, has been delayed by several months. The plant was first intended to build only the Peugeot Landtrek bakkie.
Of the 50,000 initial capacity, 35% were slated to be sold in SA and 65% in the Middle East and rest of Africa. But because of the invasion of new bakkie brands, Whitfield says it’s no longer viable to concentrate solely on Landtrek and that a Stellantis-brand car will also be part of the initial offering.
Mohareb says Rosslyn still hopes to find an alternative small bakkie to build at Rosslyn but that would take one or two years to be ready — time that Nissan SA may not have within the Japanese parent’s rationalisation timeline.
Of Nissan’s African aspirations, he says that with Rosslyn the only current Navara producer on the continent, the loss of its production would clearly be felt.
Nissan has a car plant in Egypt and there are plans to expand operations in other North African countries like Algeria and Tunisia — though how these will be affected by the group’s cutbacks is unclear.
African market
The carrot for Nissan, as for all motor companies, is that the African new-vehicle market, currently about 1.3-million, is forecast to rise to at least 3-million in the next decade. Some optimists suggest the number could be as high as 5-million.
With most major markets around the world already at saturation point, Whitfield has described Africa as the “final frontier” for carmakers looking for major new markets.
This is all a big comedown for Nissan which, under its original Datsun name, entered the SA market in the 1960s. It was the last brand to be SA market leader, in the late 1970s, before Toyota took control.
Over the years, the company’s image has taken a steady knock through inconsistent marketing and brand projection.
Today, the company offers only three vehicles ranges in SA — Navara, X-Trail (once SA’s runaway SUV market leader) and the Magnite car or panel van.
In the first four months of this year, Nissan sold 5,756 vehicles in SA.
Mohareb says two small imported SUVs, both built in India, should join the mix soon, along with the latest Patrol luxury offroad station-wagon.
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