BMW Group South Africa (BMW SA) will, over the next two years, invest R400-million in a new regional distribution centre (RDC) and the expansion of its Midrand headquarters.
The R400-million investment is in addition to the R6-billion injection, announced in November 2015, to prepare the company’s Rosslyn plant, in Tshwane, to build the next-generation BMW X3 sports utility vehicle (SUV).
BMW SA currently builds the 3 Series for the local and exports markets.
Delivery of the first new X3s from Rosslyn to customers will take place in 2018, says BMW SA and sub-Saharan Africa CEO Tim Abbott.
He says South African production of the X3 has been brought forward, owing to increasing global demand for BMW’s X-model range.
However, he notes that the company will not rush the first car off the assembly line.
He says “quality is key” and that BMW SA “doesn’t want to drop the ball”, as X3 production at the Rosslyn plant will be the first time a BMW X-product is produced outside the US.
BMW SA will not export the new X3 to the US, he adds, but will target Europe as its main market, as well as possibly some of the company’s other traditional markets, such as Australia.
BMW SA currently exports the 3 Series to the US, as well as a host of other markets.
In a January interview, US President Donald Trump criticised German carmakers for failing to produce more cars on US soil, threatening them with a 35% import duty. He especially targeted imports from Mexico.
BMW SA’s new RDC, which is, in essence, a parts warehouse, will be located at the Waterfall distribution campus, with construction already under way.
This 32 000 m2 customised warehouse – twice as big as the current warehouse – will service customers of the BMW, Mini and BMW Motorrad brands in South Africa, and also possibly sub-Saharan Africa.
BMW SA’s current parts warehouse has been struggling to meet demand, says Abbott.
The relocation of the current warehouse, located at the BMW SA head office, in Midrand, to the new site in 2018, creates space at the Midrand campus for the revamping of the current warehouse into a new training centre for BMW SA dealer staff.
The Midrand Campus will, in future, also house the SAP Shared Services Centre and information technology (IT) operations, currently located in Pretoria.
Existing office space will be expanded and revamped to accommodate the growth of the IT function at BMW SA.
The company has been selected from the 140 countries in the BMW group network as a hub for SAP systems development, owing to the unique skill set of its IT personnel. It services countries such as China and the US.
Once all the construction work has been completed, the expanded Midrand campus will bring together staff for corporate services, sales and marketing, IT, dealer training and financial services.
The revamp of BMW SA’s Midrand headquarters and the new RDC will allow the company “to remain relevant to changing customer needs by bringing together cross-functional disciplines in one centralised powerhouse”, says Abbott.