BMW SA ‘not exposed' to current US tariff uncertainty

The Citizen

3 days ago

But group says bilateral trade agreements with the UK, Europe and US are essential to the future of vehicle production in SA.
BMW South Africa boss Peter van Binsbergen says that the current uncertainty around US tariffs being imposed on vehicle imports from South Africa and the renewal of the African Growth and Opportunity Act (Agoa) will not impact the group in the short term.
'Currently – this year and in next year's plan – there are no exports to the US in our production plan, which is fully maxed out on demand,' he said on Thursday.
'The US is a customer market for the [BMW] Rosslyn factory. In the last three years of the previous X3 we exported a lot to the US, and we had about 10 to 15% of our volume going to the US,' he explained, but said the group is not currently exporting to this market.
'Right now, we are actually not at all exposed to the current tariff uncertainty,' Van Binsbergen said.
But he noted that the US has always been an important customer of BMW SA. 'Long term, South Africa, our industry, and [we] definitely want the US as a customer,' he stressed.
ALSO READ: How will the 25% US import tariff affect SA's auto industry?
'Agoa must remain'
'A big market like the US needs to be a customer of the South African auto industry. We always want to count on the US as a market, which is why we believe Agoa benefits must remain,' he said.
Van Binsbergen added that to secure the future of vehicle production in SA, it is absolutely essential for the automotive industry that there are bilateral trade agreements between SA and the United Kingdom, Europe and the US.
He also stressed that the government' automotive industry programmes, such as the Motor Industry Development Programme (MIDP), Automotive Production and Development Programme (APDP) and APDP 2, and the policy stability these programmes provided, are why vehicle original equipment manufacturers (OEMs) are in SA and have the size of production facilities they have in the country.
Van Binsbergen said a stable automotive policy environment and bilateral trade agreements between SA and the industry's markets meant OEMs could invest with confidence for the long term.
He noted that 74% of the automotive industry's exports go to Europe because of the bilateral trade agreement between South Africa and Europe, adding the agreement needs to be updated to take into account the new energy vehicles (NEVs) exported from SA into Europe, which wants to go fully electric.
ALSO READ: Act now to absorb impact of Trump tariffs on SA vehicle manufacturing sector – BLSA
'A bit of frustration'
Van Binsbergen said 96% of BMW South Africa's production is exported and confirmed 'there is a bit of frustration' with the South African government's failure to announce NEV incentives to stimulate consumer demand for these vehicles in the South African market.
He said President Cyril Ramaphosa made a very clear statement at SA Auto Week last year that the focus would be on all NEVs and that there would be a customer-based incentive.
This is a reference to Ramaphosa's announcement in October 2024 that consideration must be given to incentives for manufacturers as well as tax rebates or subsidies for consumers to accelerate the uptake of electric vehicles (EVs).
However, the president did not provide a timetable for implementing these incentives or indicate how they would be funded.
Van Binsbergen said these incentives 'still haven't come' and the market for NEVs is only moving organically, with only customers who really want an EV buying them.
'Those who say they are still too expensive are not buying. There's no question we definitely need help with the EV market with some incentives. Then of course the after sales industry grows, the charging infrastructure grows and you start creating a whole ecosystem, which means more jobs, so we need it,' he said.
He added that to get the entire NEV value chain running properly in South Africa 'is a lot about the chicken and the egg'.
ALSO READ: Automotive Business Council concerned about Trump's tariffs
Charging infrastructure
He said the charging infrastructure will only grow if the NEV car parc grows – and that will only grow if there is local demand.
'Anywhere in the world, you see the minute the government incentives kick in, customers start buying the vehicles because it becomes more affordable and it becomes comparable to an ICE [internal combustion engine vehicle],' he said.
Mikel Mabasa, CEO of automotive business council Naamsa, said earlier this year that South African-based vehicle manufacturers are planning to accelerate the multi-million-rand project to install more than 100 additional NEV charging stations on major routes countrywide in 2025.
Naamsa confirmed in August 2023 the adjudication process for the tender worth 'hundreds of millions of rand' for the installation of the additional charging stations had been finalised and a recommendation on the preferred bidder had been made 'to our principals' but the project stalled after that.
Van Binsbergen said this project 'is still on the agenda' but the right partner needs to be found.
'I'm still pushing the buttons because charging infrastructure should be brand agnostic. Each brand should not be building their own charging infrastructure. It should be available to all customers from all brands, and it should fit the market's requirements and not one brand's requirements otherwise you end up with too many charging stations in one place and none in the other.
'So, you have to do it together and no question Naamsa is the right place to do that,' he said.
Van Binsbergen confirmed there is a problem with the payment system because it is not simple, and it should be just a credit card.
He said everyone currently needs their own charging card depending on which brand they are with, which needs to be resolved and was the task for Naamsa.
'Make it a single network of chargers where you can pay with one card wherever you go and all customers can fill up there,' he said.
This article was republished from Moneyweb. Read the original here.