BMW warns South African suppliers
15/03/2011
The company’s board member with responsibility for purchasing, Herbert Diess, made the comments to South African media at the end of the BMW Annual Accounts Conference in Munich in mid-March.
BMW South Africa's plant at Rosslyn near Pretoria produced more than 46,000 vehicles in 2010; the group sold about 9,600 of these locally and exported the remainder, chiefly to the United States and Japan.
According to the automotive company, 53% of the material going into its South African-produced cars is from South Africa. The South African government wants automotive manufacturers active in the country to use 70% locally produced material so that a greater proportion of the added value benefits various sectors of the domestic economy.
BMW said it does not expect to meet this target in the near future because of what Dr Diess referred to as “a deteriorating level of competitiveness” in suppliers there, mostly because of rising labour costs. But he also said specifically that sourcing leather in neighbouring Botswana instead of in South Africa was one of the ideas the company was looking at.
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