Localisation would be key in gaining ground in an increasingly important market, Iveco Africa and Middle East regional head Luca Sra said on Wednesday.

This comes as the company announced the formation of Iveco South Africa Works, a new 60:40 joint venture (JV) partnership between Iveco and local public transport operator and bus manufacturer Larimar group, which would result in the construction of a R530-million commercial vehicle assembly plant near Rosslyn, outside Pretoria.

The 5 000-unit-a-year assembly plant would be commissioned in 2014.

Speaking at the Truck and Bus Show, held at Nasrec, Sra said Iveco’s commercial vehicle sales into Africa and the Middle East had increased from accounting for 5% of worldwide sales in 2010, with 8 000 units, to 11% in 2012, with 15 000 units.

“Key elements in our all-round growth strategy [in South Africa] are local manufacturing, a new product range and service improvement,“ Sra commented.

Iveco’s operations in South Africa, which was a country of “global growing importance“, had nearly doubled its performance over the past two years and now accounted for 20% of these sales, he said, adding that there was “ample room for growth“.

Localisation in South Africa would bring Iveco “considerable benefits“ and would open eligibility to bus tenders and enable a high broad-based black economic-empowerment rating, as well as improve the group’s competiveness, deliver new content shaped to local needs and enable a complete and optimised product offering.

“The decision of localising an Iveco production plant in South Africa comes from our strategy of manufacturing globally, while tailoring products for local needs.”

The completely knocked-down assembly plant, which would employ about 1 000 people, would deliver trucks, which would be commercialised by Iveco, and buses, which would be commercialised by the JV.

The new JV would also leverage on the extensive product portfolios Iveco had in Europe and in China.