Policy bottlenecks harm Peugeot sales

Regulatory glitches have dampened the pomp and fanfare that characterised the launch of the Walvis-based assembly plant a year ago.

20 January 2020 | Business

Only a paltry 93 vehicles – out of a targeted 1 551 - have been assembled at the Walvis Bay Peugeot plant since its launch by President Hage Geingob in December 2018.

The plant is struggling to get out of the starting blocks due to regulatory complications that continue to deny the company access to the highly sought-after Southern African region.

The struggle to sell vehicles in the 300 million people southern African market is said to come as a result of the lack of an agreement between Namibia and markets it hopes to export the vehicles to.

The vehicles are earmarked to be taken up by Peugeot Citroen South Africa. The plant assembles Peugeot 3008, Peugeot 5008 and Opel Grandland X models.

“The sales are struggling because we are waiting for a customs sales agreement to fall into place,” the plant's MD, Robert van Rooyen, said.

Van Rooyen said the plant would continue to assemble vehicles until the middle half of the year.

“We have a few shipments in place for the year so we have a bit of work on our hands,” he said.

Ultimately, it would be up to PSA to do with the vehicles as they pleased, Van Rooyen said.

Only 93 vehicles have been assembled so far in comparison to 1 551 that were earmarked to be built, Van Rooyen said. The assembly of 5 000 vehicles is earmarked by Peugeot, Van Rooyen said.

He would not provide sales figures, saying the goal was manufacturing. The Namibian government, Van Rooyen said, had bought a few vehicles.

A trade ministry official told Namibian Sun that customs agreements within the Southern African Customs Union (Sacu) made it difficult for manufacturers that were keen on choosing destinations like Namibia for their plants, as 60% of a car components had to be assembled locally.

“The issue has to do with some additional duties that arise as a result of rules of origin aspects of the Southern African Development Community – Economic Partnership Agreements (SADC – EPA). As a country we thus are working and have been working on policy solutions towards that. People must restrain from blaming Sacu or South Africa.

“Rules of origin are a key provision in many trade agreements and could at times, if you were not highly observant, affect the development of your sectors downstream,” the official said.

At the national level, Namibia is making key inputs with respect to rules of origin for sectors such as the automotive industry.

According to officials, various trade agreements had been signed that were not advantageous and work was no under way to rectify agreements that would make it easier to sell locally manufactured vehicles.

According to the official, the ministry was trying to ensure that it could import a number of vehicle parts to enable assembly to take place. The current policy states that 60% of the vehicle's parts should be manufactured locally while 40% of the parts needed to assemble the vehicles can be imported.

“The ratios are being watered down. It is not a Peugeot matter but a policy matter. We are working on it,” the official said.

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