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How the Mercedes X-Class bakkie sunk a Nissan factory

2020-05-29 12:38

Lance Branquinho

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• Changes coming as Nissan in crisis

• Spain's loss could benefit South Africa

• Tshwane plant could be gold for automakers

Barcelona's loss is Tshwane's gain, as Navara production set to end in Spain. 

Scenes unfamiliar to Europeans have unfolded as Nissan announced a radical global restructuring. 

The Japanese company is in crisis and has been for a while, but after posting its worst performance in a decade, changes are coming - fast. 

After reporting an operating loss for the last financial year, Nissan has committed to reducing its global production capacity by 20%. Burning tyres outside the company's Barcelona factory this week, illustrated the magnitude of Nissan's decision.

Spanish employees are furious at the notion that their factory is one of those Nissan is abandoning, but there could be benefits for South Africa in all of this misfortune. 

Image: Wheels24/ Sean Parker

The X-Class curse 

Nissan's Barcelona factory is one of five global locations for Navara bakkie production. There is no question that Nissan's future strategy will remain committed to bakkies, as they offer profits tremendously, at relatively low costs and simple production systems. Why close down its Spanish operation?

The answer lies not in Navara, but with Mercedes-Benz's failed X-Class bakkie. Nissan's Barcelona facility was commissioned to build X-Class on contract for Mercedes-Benz, adding volume and securing future capacity.

When the X-Class bakkie project prematurely failed in May of this year, just a bit more than two years after launching, it created instability for Nissan Motor Ibérica. Mercedes-Benz's failure is perhaps the undeclared reason why Nissan's Barcelona factory is closing. If the Germans remained a core customer, there could have been sufficient volumes and assembly complexity to sustain it, but that is no longer the business case.

Bakkie demand has surged in the last few years, and Nissan is unlikely to sacrifice its ability to supply Navaras. The question then is: when Barcelona closes, which Nissan bakkie building facility, will take its place to produce additional Navaras?

This is where South Africa enters the equation. Nissan's Rosslyn facility, in Tshwane, is a specialist bakkie plant. It currently builds both the NP200 and NP300 bakkie models. And guess what else is coming?

nissan,navara,nissan navara

Nissan Plant in Rosslyn, Pretoria

Tshwane becoming South Africa's Motown

Nissan invested R3-billion in the Rosslyn factory last year, with a Navara future in mind. The validity of this strategy is now crystalising, as Nissan's decision to allocate South Africa funding for an assembly line upgrade, clearly showed that plans were afoot for rationalising its European bakkie production assets. 

Nissan's restructuring is part of a broader reorganisation of the uncomfortable alliance with Renault and Mitsubishi. All three companies have committed to significant badge engineering in future, with brands taken precedence is specific regions. 

Mitsubishi will be given responsibility for the ASEAN and Oceania region. Renault takes control of Europe, Russia, South America and North Africa. Spearheading the alliance in China, Japan and North America, will be Nissan. 

nissan navara stealth

Image: Wheels24 / Janine Van der Post

So where does South Africa figure in all of this? Good question. Nissan and Renault are both strong sellers locally, but the Japanese brand has bakkies, and those are good as gold for any automotive brand wishing to trade in South Africa. 

The bolstered status of Rosslyn as a Nissan global production asset will also give the Japanese possible precedence over the French when it comes to an alliance presence in South Africa. 

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Read more on:    mercedes  |  nissan  |  lance branquinho  |  navara  |  bakkies  |  x-class

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