Stellantis expects to make decision on South African plant in coming months

By Nqobile Dludla

JOHANNESBURG, June 30 (Reuters) - Stellantis is still reviewing plans for a proposed manufacturing plant in South Africa's Eastern Cape province and expects to make a decision in the coming months, the company's local manager said on Tuesday.

The automaker announced plans in 2023 to build a greenfield factory in the coastal city of Gqeberha, formerly known as Port Elizabeth, its first plant in South Africa, with the original intention of producing only the Peugeot Landtrek pickup truck.

The plant was originally due to be completed last year, but the plans are being reworked to support multiple models as export economics and consumer preferences change.

"We certainly have not stopped that process. We put it on pause," South Africa managing director Mike Whitfield told reporters at a press conference outlining the Middle East and Africa section of the group's €60 billion ($68.47 billion) global strategy unveiled in May.

"We've seen the market changing significantly with the advent of Asian players, the buy down to below 400,000 rand ($24,399)," Whitfield said.

"I think three and a half years ago... 94% of all pickups sold here in Africa were effectively made here. Now it's down to 70-something."

Whitfield said the company expects to clarify the next steps for the plant within months.

LOWER-COST CHINESE VEHICLES HITTING THE MARKET

The review comes as the South African market is reshaped by a rapid influx of lower-cost vehicles from China such as Chery and other Asian producers, forcing global carmakers to rethink production strategies and pricing.

Asked whether Stellantis, which has existing partnerships in Europe with Chinese automakers Leapmotor and Dongfeng, would be open to sharing its planned South Africa plant with other Chinese firms, Whitfield said attention was "very much focused on ourselves".

However, the company will increase import sourcing for the country from Asia, including China, he said.

"The Chinese have done a superb job. You can't take that away from them, and to be competitive, we need to source with the same degree of competitiveness," he said.

In the Middle East and Africa region, plants in Morocco and Turkey are among the most competitive in Stellantis.

It sees untapped potential further south in the region, where it will complement local production and current regional offering with SUVs and pickups sourced at "best benchmark costs" from Asia, Samir Cherfan, chief operating officer for the Middle East & Africa, said.

($1 = 16.3712 rand)

($1 = 0.8763 euros)

(Reporting by Nqobile Dludla; Editing by Jan Harvey)