DaimlerChrysler SA last year recorded its best results yet, though the MIDP’s uncertain future remains a key concern for the local manufacturer.
DaimlerChrysler SA last year recorded its best results yet, though the MIDP’s uncertain future remains a key concern for the local manufacturer.
The company on Wednesday reported record revenue of R27,5 billion for 2005, an 11 per cent increase over 2004. The local manufacturer also upstaged its parent company, which recorded growth of only 8 per cent last year.
Though the manufacturer foresees further success with the sales of its new cars, of greater concern is the future of the Motor Industry Development Programme (MIDP).
The current plan has come under scrutiny from the World Trade Organisation, and its successor could determine the continuation of the local manufacturer’s export programme. The existing programme expires in 2012, and a mid-term review should be announced later this year.
DCSA’s East London plant produces the Mercedes-Benz C-Class and Mitsubishi L200 bakkie for export. It has secured the production of the next-generation C-Class from late 2007 and will spend R1,5 billion to outfit its own and supplier plants before then.
But DCSA chairman Hansgeorg Niefer emphasised that the possibility of manufacturers withdrawing from South Africa was “very real” if a similar replacement for the MIDP was not implemented.
He stressed that South Africa’s location in relation to global markets would continue to pose a problem for the export programmes of local manufacturers.
DCSA is currently trying to follow BMW’s example of exporting right-hand drive models to the US as part of the Africa Growth and Opportunity Act where exports with 35 per cent local content qualify for lower import duties. However, Niefer admitted that DCSA was facing stiff competition from German plants to produce the right-hand drive C-Class for the US and other markets.