BMW to invest $417 million dollars in its South African plant image

BMW plans to invest around 417 million dollars in its South African plant to start production of the new X3 SUV.

In a statement released yesterday, BMW has announced that the production of 3-Series sedan in its South African plant will be replaced by automaker’s new X3 model, which means this will be the first time the SUV will to be produced outside the US. To set this up, BMW will spend more than 6 billion rand (417 million dollars), 3 billion rand for the plant and the rest on suppliers and training. The new model will be sold both locally and abroad, according to BMW South Africa Managing Director Tim Abbott. The Rosslyn factory produces the entire X line-up and it is expected to reach full capacity next year. Tim Abbott also said that he anticipated an increase in demand in Africa. “28 percent of all the cars we sell around the world are X models, virtually one in three,” he added. “We see the X3 as being, long-term, a high-demand vehicle in countries like Nigeria or Kenya or Tanzania.”

To increase major carmakers’ interest and to make them boost investments in factories, the South African government uses state incentives, therefore the number of vehicles produced in the country is forecast to rise to 622,000 this year, according to the National Association of Automobile Manufacturers of South Africa. As a consequence, automakers like BMW, Ford and Volkswagen have shown interest in investing in factories in the region. The production of the 3-Series will continue at the Rosslyn plant until the end of its lifecycle, and it will also continue to produce the X3 at its South Carolina plant.

Via Bloomberg