A fight is looming between Namibia and National Association of Automobile Manufacturers of SA (NAAMSA) over the country’s decision to allow Peugeot to open an assembly plant at Walvis Bay, a decision which the grouping says violates Southern African Customs Union regulations.
Although the Ministry of Industrialisation, Trade and SME Development this week rubbished the claims, Business Day of South Africa reported on Wednesday that the South African government and motor companies want to be sure the deal does not breach Southern African Customs Union (Sacu) rules that would allow the vehicles to be exported duty-free to SA and other Sacu members — Botswana, Lesotho and Swaziland.
Deputy permanent secretary in the Ministry of Industrialisation, Trade and SME Development, Michael Humavindu told Windhoek Observer that the country was not moved with the allegations, which he said were from National Association of Automobile Manufacturers of SA (NAAMSA) and not the South African government.
“It is allegations from NAAMSA and we have not received any formal communication from the South African Department of Trade and Industry.”
Humavindu also questioned the authenticity of the Business Day article, which he said had quoted nameless officials, adding that there was no substance in the allegations.
“Substance based on what?” he said when asked if there was truth that Namibia had violated Sacu regulations.
Business Day reported on Wednesday that South Africa wants Namibia to explain the Peugeot deal.
The South African trade ministry did not respond to questions sent on Thursday to explain its position
Import duties are imposed according to the complexity and degree of local vehicle manufacture. Imported car kits, individual components and vehicles completely built in Sacu all carry different duties, the paper said.
The plant is a joint venture between Peugeot’s parent company, Groupe PSA, and the Namibian Development Corporation (NDC).
The plant will start by building the Peugeot 3008, then introduce more products according to market demand. The intention is eventually to add Opel cars. PSA bought the Opel brand from General Motors in 2017.
The Walvis Bay facility will assemble imported car kits from France and Germany.
Nico Vermeulen, director of the National Association of Automobile Manufacturers of SA (NAAMSA), said on Wednesday: “We are completely in the dark. Namibia has told us nothing. The SA Department of Trade and Industry says it wants clarity. We have also asked SA customs authorities to investigate.”
The Walvis Bay plant is part of a concerted Peugeot attempt to rebuild its footprint in Africa, where it was once a dominant force. PSA plans to open a Nigerian SKD plant, with a medium-term annual capacity of 10 000 units, early in 2019 and is investing heavily in Morocco.
PSA vice-president Jean-Christophe Quemard said the Walvis Bay move was part of the group’s strategy to grow annual sales in Africa and the Middle East to 1 million by 2025.
Quemard said the Walvis Bay plant hoped to reach annual production of 5,000 by 2020. Even that is an ambitious target.
Business Day reported that SA used to be a major market for both Peugeot and Opel but sales have dropped in recent years. PSA gave up control of its SA import company, Peugeot-Citroen SA (PCSA), in 2017 ceding 51 percent to a Japanese-controlled retail group, Trust Auto.
Opel vehicles were built in SA until the end of 2017, when GM disinvested. Local Peugeot production stopped in 1985.
In an early interview in August, Humavindu said Namibia is taking advantage of the Southern African Customs Union Automotive Development Programme by attracting companies that cannot meet the South African threshold of 50,000 units per annum.
“It is not all cars that sell like Toyota. A lot of the models do not sell beyond 5,000 units. Maybe that should be a niche for Namibia,” he said then.
Nictus Holdings Limited chairman, Philippus Tromp, said in the company’s Annual Report for the year ended 31 March, that he was optimistic that assembling Opel vehicles in Walvis Bay will bring a new dimension to Auas Motors and will play a major role in propelling the company to a new level of operations. -Additional reporting by Business Day.