Nissan South Africa (SA) faces two lean production years, says MD Mike Whitfield, as the local arm of the Japanese carmaker comes to the end of the model life cycle of its one-ton NP300 pick-up.

Nissan SA’s Rosslyn plant, in Pretoria, also produces the NP200 half-ton bakkie.

Following the run-out of the NP300, Nissan SA has the intention to produce vehicles that can secure a “significant share” of the new- vehicle market in Africa and South Africa.

“Our focus is Africa, and not Europe,” says Whitfield. “The models that sell well on the continent are pick-up and small B-segments cars.”

He says Africa is key to Nissan’s global growth targets, with the continent regarded as the world’s largest untapped frontier.

While vehicle ownership stands at 160 cars for every 1 000 people in South Africa, 800 in the US, and 133 in Botswana, it is a mere 45 in Egypt, 31 in Nigeria and 30 in Ghana.

Nissan’s business in Africa has been divided into a north and south unit, with Whitfield heading up operations in the south.

He regards Angola, Kenya, Ghana, Nigeria and South Africa as his region’s key markets.

Six years ago there were only bakkies and sports utility vehicles on Angola’s roads, says Whitfield. Now, however, as roads are improving, there are many small B-segment cars on the road.

Nissan this year saw the first vehicle, a Patrol, roll off its new production line in Nigeria, built in partnership with the Stallion Group, and in response to the Nigerian government’s drive to stimulate vehicle assembly in the West African country.

The plant currently produces 200 vehicles a month, but the aim is to grow to 45 000 units a year, says Whitfield.

In August, Nissan extended its Nigerian production line-up to include mass production of the Almera and NP300 Hardbody.

“One of the complementary aspects of our South African and Nigerian plants is that the Lagos plant is being provided with parts from our Rosslyn plant to assemble the NP300 Hardbody,” says Whitfield.

There are many challenges operating in a developing continent such as Africa, says Whitfield.

A lack of integrated policies acts as a barrier to investment in many countries. For example, each of Africa’s 54 countries has its own, often complicated, legal and regulatory frameworks. There is also a dearth of technological expertise, particularly in the component supplier space.

“The logistics of delivering vehicles and parts can be a nightmare because of poor road and rail infrastructure. Clearing items through customs, either at ports or on land, can lead to lengthy delays in delivery,” adds Whitfield.

Parallel imports, or grey sales, are also prevalent in many markets. This not only affects the competitiveness of vehicle manufacturers, but also leads to inaccurate vehicle ownership statistics.

“For example, although Nigeria’s official total industry is only 50 000, we know the real figure is closer to 500 000 – half of which are parallel imports,” says Whitfield.

Also, while Africa presents tremendous growth opportunities, half of the world’s highest risk countries can also be found on the continent.

There is also often uncertainty around government policy, a culture of erratic duty structure changes and a history of forex fluctuation.

However, one-million vehicles are currently sold in Africa a year, and this is growing at 7% a year, says Whitfield.