Ford puts R600m in Gqeberha factory

• Investment is another indication of confidence in SA

US motor giant Ford has invested R600m in its Gqeberha engine plant in the Eastern Cape to make V6 turbodiesel engines for its new Ranger pickup. This is in addition to the R15.8bn already spent on the company’s Tshwane vehicle assembly plant, which will produce the Ranger in 2022.

US motor giant Ford has invested R600m in its Gqeberha engine plant in the Eastern Cape to make V6 turbodiesel engines for its new Ranger pickup.

This is in addition to the R15.8bn already spent on the company’s Tshwane vehicle assembly plant that will produce the Ranger in 2022.

The investment is another indication of confidence in SA by multinational automotive companies. Mercedes-Benz, Toyota and Nissan have all completed multibillion-rand investments this year.

The government’s latest automotive policy, the SA Automotive Masterplan, which was published in July and is mostly a continuation of previous legislation, is expected to continue the trend.

Ford SA operations vicepresident Ockert Berry said on Thursday that the money would also pay for production upgrades to existing, smaller diesel engines. Hybrid engines — using dual diesel and petrol motors — would be added later, Berry said.

Ford SA exports two-thirds of its Ranger production, mostly to countries that will ban diesel and petrol engines from 2030.

Berry said: “There will be a hybrid version in the newgeneration Ranger. The only question is when.”

Given that hybrids will themselves be banned in many markets from 2035, he said the next Ranger, due in about 2031, would almost certainly include full-electric versions.

Nearly all vehicles built by the SA motor industry are petrol or diesel and more than 60% of them are exported.

The government is preparing a White Paper on encouraging the local sale and manufacture of hybrid and electric vehicles.

Only Mercedes-Benz SA and Toyota SA build hybrids locally.

Ford’s engine plant is in the Gqeberha industrial suburb of Struandale.

The new investment will increase annual engine capacity to 250,000.

The R15.8bn Tshwane investment will lift Ranger manufacturing capacity to 200,000 units a year. Struandale also exports engines to Ford plants in other countries, including the US, China, India, Russia and Turkey.

The Struandale investment will increase pressure on the government to keep its promise to provide Ford with a dedicated, direct rail link between Tshwane and Gqeberha.

Frustrated with constant holdups at Durban, its traditional export harbour, Ford plans to ship all its production through Gqeberha.

Ockert said discussions between Ford, the government and state transport operator Transnet were progressing slowly. “It will happen. We just have to wait,” he said.

Transnet had originally offered to have everything running by 2028 but Ockert said both the Ranger and engine plants would be working at full capacity by 2025.

“If the link is not ready by then, everything will implode,” he added.

THE AMOUNT IS IN ADDITION TO R15.8BN SPENT ON THE FIRM'S ASSEMBLY PLANT IN TSHWANE, WHICH WILL BUILD THE NEW RANGER IN 2022