Management shake-up at retrenchment-hit Nissan SA

There has been shake-up in the senior management of Nissan South Africa, with new managing director Maciej Klenkiewicz indicating that his focus will be on unlocking the potential in Africa by expanding into new markets in the continent to increase sales.

Klenkiewicz has replaced Nissan SA country director Kabelo Rabotho, who will be leaving the company at the end of this month after having been in the position since December 2020.

Klenkiewicz, who is also responsible for independent markets in Africa where Nissan has distribution agreements, also provided more insight into the decision to reduce Nissan SA’s total headcount of 1 650 by an estimated 400 employees.

Klenkiewicz said Nissan SA’s priority is to find a second product for production at its Rosslyn plant in Pretoria.

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The Russian problem

The planned retrenchments are due to its inability to secure a replacement model to its NP200 half-ton bakkie for production at the plant.

 It was planned that the replacement model would be built on a Renault-Nissan-Mitsubishi alliance shared platform in Russia but the geopolitical situation in Russia meant this model was no longer viable due to significantly reduced volumes.

Klenkiewicz said that plan has now been completely scrapped.

“Normally development of a new product for the plant takes several years but we are taking this very seriously and we are trying to advance it as much as we can.

“Currently we are looking through the whole portfolio of our global production in trying to find what is the best model that we can fit into the South African market for Africa but to also localise in the plant in Rosslyn,” he said.

“This project is ongoing and I believe we will find a solution soon.”

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Down to the Nissan Navara

Production of the NP200 will stop in March 2024 at the end of the model’s extended lifecycle. This means the Rosslyn plant, which has a production capacity of 45 000 units a year on a single shift, will only be left producing the Navara.

Production of the soon-to-be-discontinued NP200 accounted for half of the Rosslyn plant’s production volumes.

Klenkiewicz said increasing domestic production volumes are key to Nissan SA’s business in South Africa and it is investing in the Navara as a product by enhancing its portfolio of Navara models through extensions and special additional items to the model.

“This will positively impact our exports but the domestic market will benefit a lot from that as well,” he said.

Klenkiewicz said the goal is for the Rosslyn plant to be operating at full capacity, which is why it is looking for new destinations for its products.

“The investment we make in the product and the production capacity for the Navara is for our expansion but also for the domestic market,” he said.

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Adjustments

He added that Nissan SA’s exports will soon exceed its local sales in South Africa and it is adjusting the size of the business to ensure the company remains competitive and sustainable.

“We are planning to stay here and invest more and [we] see our future in South Africa,” he said.

“We need to adjust now to ensure our sustainability into the future.”

Klenkiewicz said the plan is to strengthen Nissan’s business operations in South Africa and confirmed that two new passenger car models to be produced in India will be imported for the South African and African market between now and 2026.

He was unable to provide a firmer date for these imports because the commencement of production of these models has yet to be finalised.

Industry incentives at risk

The Rosslyn plant will not qualify for all the benefits available in terms of the Automotive Production and Development Programme (APDP) if it does not produce more than 50 000 vehicles a year.

But Rabotho said engagements are taking place with the government through automotive business council Naamsa about the 50 000 a year production threshold, which is under review.

He said the threshold is an issue for all new vehicle manufacturers that are considering establishing a manufacturing presence in South Africa.

Klenkiewicz added that Nissan is growing in Africa but its expansion is currently focused on the north countries including Morocco, Algeria (where it is re-establishing its business) and Libya (where it has just appointed a distributor).

He said in terms of Nissan SA’s operations and plant in South Africa, it is largely looking for new markets and the expansion opportunities for Nissan products.

“Navara is our superstar, hence our directions to extend our business to Libya.

“We are open in Algeria next year with the distribution agreement we just signed two weeks ago and then we are looking at all other opportunities within the Africa regional market in terms of destinations,” he said.

Klenkiewicz said there is great potential in Africa for Nissan, which is the reason for its investments in countries in the continent.

“The volumes might be low but in some markets in Africa Nissan has a 10% market share. I feel good about the future [in Africa],” he said.

This article is republished from Moneyweb under a Creative Commons licence. Read the original article.