Mahindra: a great way to develop a gateway

Mahindra farm vehicles have landed in SA

By John Fraser

Sometimes clichés are valid. Just as Hong Kong has for decades marketed itself as the gateway to China, so, too, South Africa has its own gateway claim.

We boast when a multinational sets up its African HQ in SA, and sulk when instead the choice is, say, Lagos or Nairobi.

The ANC government has invested hundreds of billions of rand into the SA automotive sector, through a series of support programmes, with the result that we have some of the best assembly plants in the world. Now the focus is on boosting volume and local content, as well as exports.

Nissan is doing well in developing not just its SA operations, but also in devising an African strategy. It is not alone.

Of course, not all the auto sector is taken up by the four-door family car.

At its Durban plant, Mahindra is expanding production of bakkies, or pickups, eyeing the African market.

It has also just launched a range of farm vehicles in SA, and as the world’s largest tractor manufacturer, we can see it ploughing its way through the region.

There is some export support for vehicles which are made in Durban, but the real incentive dosh will come when local content is boosted and output reaches higher levels.

Expansion is certainly on the cards, helped by the certainty which is provided by the new government support strategy for the auto sector, known as the Masterplan.

With South African as its chosen gateway into Africa, the Indian company is not just moving from traditional vehicles into tractors, which could, in time, be produced in Durban, but might also expand into production of generators. Certainly, Eskom’s failures should generate a good generator market for some time to come.

With the election behind him, President Ramaphosa will undoubtedly build on the investment drive he launched last year.

He could do worse than trot out the gateway cliché a bit more often.

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