Nissan SA says it will not extend its manufacturing agreement contract with Fiat Auto SA beyond July 2008. In response, the Italian marque said it would investigate alternative long-term production opportunities in South Africa.

Nissan SA says it will not extend its manufacturing agreement contract with Fiat Auto SA beyond July 2008. In response, the Italian marque said it would investigate alternative long-term production opportunities in South Africa.


Fiat Auto SA currently shares Nissan's production facilities in Rosslyn and has produced 55 000 vehicles - including Uno, Palio and Siena models - since the inception of the contract. The three-quarter-ton Strada bakkie, which was unveiled at last year's Auto Africa Expo at Nasrec, has yet to go into production.


The Italian manufacturer is a small producer in South Africa, but any erosion of the domestic production base will be a setback for the country's ambitions to double production to about one million units a year in order to become a serious global player.


"Fiat Auto SA confirms that South Africa is an important market as is borne out by the continuous investment that the company is making in the dealer network, in business processes, in Information Technology and in upgrading the product range," a spokesman for the company said.


Fiat sold about 8 000 vehicles last year, down from about 11 600 in 2002. Its market share has declined from 3,3 to 1,8 per cent during this period. All six of the Alfa Romeo products are imported, as is the remainder of the Fiat range: Punto, Stilo, Doblo, Multipla, Panda 4x4 and Ducato.


If Fiat Auto SA chose to only import vehicles, it would still be able to offset the cost of vehicle imports through the MIDP, as it exports vehicle components from South Africa.


Meanwhile, some industry insiders say that due to Nissan's global affiliation with Renault, it was also possible that the Japanese brand may have plans to produce the Logan, touted as an affordable new car to emerging markets around the world.


The Logan is based on the new B platform used for the Nissan Micra, Renault Modus and the upcoming third-generation Renault Clio, and about 550 of the 1 300 parts are carried-over from existing models.