PRETORIA, SOUTH AFRICA - Nissan South Africa said on Monday it had been awarded a one-billion-rand ($148 million) export contract by its Japanese parent in a move that will see it expanding truck sales beyond the African continent.
The deal to export Hardbody single cab pickups to Europe, Singapore, Australia and New Zealand marks another milestone for the country's motor industry, which is one of its largest industrial employers.
Nissan South Africa Managing Director Julio Panama told a news conference the contract formed part of Nissan's three-year plan to grow profitably by utilizing its resources worldwide.
"It is important to us, for our suppliers and for South Africa," Panama said.
"It places us among the global players in the very competitive automotive market and is evidence of our parent company's confidence in our ability to deliver quality vehicles."
Nissan South Africa, wholly-owned by Nissan, joins European and Japanese rivals such as DaimlerChrysler, Volkswagen, BMW and Toyota Motor Corp., which have also awarded export contracts to their South African subsidiaries.
These companies are taking advantage of the government's motor industry development plan (MIDP) aimed at turning South Africa into a global market for exports of high quality auto products.
The MIDP was introduced in 1995 and has been extended to 2012 to maintain the momentum of exports.
Auto exports make up 12.8 percent of South Africa's total exports, and the sector -- the third largest economic division -- contributed 6.3 percent of the country's gross domestic product (GDP) in 2002.
Trade and Industry Minister Alec Erwin said the Nissan contract, initially for a two-year period with an option of an extension for a further three years, had been won at a time when the global auto sector was experiencing overcapacity.
"I am quite confident that this is the beginning of more good things to come, given that they (Japan) have given you some tough markets to sell," Erwin said.
The contract will see Nissan South Africa spending 250 million rand on upgrading the local plant and generating much needed jobs in the supplier market.
The export program will kick off in October 2005, and the vehicles will have about 65 percent local content. Initially, 4,600 left- and right-hand drive trucks will be exported.
Nissan South Africa has a 55 percent share of the African truck market, and Panama said the latest contract provided a base from which to launch an aggressive export program.