Maserati and Jeep owner launching R3 billion investment in South Africa

 ·15 May 2024

Stellantis will start construction shortly on its R3 billion manufacturing site in South Africa.

The world’s third-largest automotive manufacturer by volume will locate its site at the Coega Special Economic Zone in Gqeberha, Eastern Cape.

Stellantis and the Industrial Development Corporation (IDC) are conducting a joint venture, with investment in the site estimated at R3 billion.

“I welcome the progress made with concluding all modalities with Stellantis that will enable construction to commence this year and the start of production of a new auto model to roll off the assembly line by the end of 2025,” said Ebrahim Patel, Minister of Trade, Industry and Competition.

The group’s brands include Maserati, Jeep, Fiat, Vauxhall, Alfa Romeo, Peugeot, Citroen and more.

“The construction of this plant is critical to Stellantis’s Dare Forward 2030 strategy,” said Stellantis Middle East Africa (MEA) COO Samir Cherfan.

“This strategy also speaks to the South African industrialization plan, which is a very important tool in helping us achieve our target to produce a million units in the MEA region by 2030 – a factor that will help us attain a 22% market share in this region.”

“Our medium to long-term objective is to ensure that 90% of vehicles sold in the MEA region are sourced from our production plants in this region.”

All fauna and flora have been removed from the site and rehomed as per an environmental impact study conducted by Coega.

“The new company to house the Stellantis-IDC JV is on track to be registered. The milestones concluded thus far will help to kick start a project that will significantly improve the economic fortunes of the Eastern Cape,” said IDC interim CEO David Jarvis.

The project includes:

  • A high level of localization is targeted at launch (35%)

  • Ultimate production volume of 50,000 units a year, with the majority destined for export

  • 1,000 new jobs to be created directly

  • Thousands of hours to be invested in training to develop local teams to global standards

Not all going out

The update on the R3 billion investment comes amid a widely reported exit or scaling back of international companies in South Africa.

Shell is selling its downstream business, including its 600 petrol stations, French-Bank BNP Paribas exited the domestic market, and Anglo American looks set to spin off Anglo American Platinum.

Despite the recent scaling back, many international companies still see South Africa as an attractive investment destination.

Data gathered by PwC recently showed that South Africa has seen net foreign direct investment (FDI) inflows (inflows minus outflows) most years since the global financial crisis of 2008.

For example, Amazon Web Services plans to invest R40 billion in South Africa over the next ten years, and the broader group will also build a R4.5 billion head office in Cape Town.

In the vehicle manufacturing space, Volkswagen Group Africa is also investing R4 billion into its manufacturing plant in Kariega, Eastern Cape, with plans to upgrade the facility in preparation for adding a third model to its production line in 2027.

Read: The one province in South Africa with more people unemployed than working – and a second fast approaching

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