Govt to buy Peugeot car plant for N$1

Government has the option to acquire the defunct Peugeot Opel Assembly Namibia (POAN) plant in Walvis Bay for a nominal N$1 after automaker Stellantis decided to close operations there.

A nominal value is a symbolic or token amount, the smallest figure possible for legal or formal reasons, rather than the asset’s real market worth.

In this case, it allows the formal transfer of the plant, equipment and shares even though officials say the equipment alone is worth more than N$50 million.

The move follows the dismissal of a High Court case in which Stellantis sought to recover N$79.9 million it said it had invested in Namibia.

The sum comprised N$17 million in initial share capital, N$14 million in research and development costs and N$48.9 million in unpaid invoices.

A senior government official told Namibian Sun that the court dismissed the claim because Stellantis had not followed the correct procedures for recovering investments.

“The court dismissed their case against the government after we proved their allegations were not true and that they had not followed the right procedures stipulated in the agreement pertaining to disputes and arbitration,” the official said.

Stellantis subsequently withdrew the matter. Both parties have finalised an agreement under which the company will hand over its shares and equipment to government for the nominal N$1.

“We are just awaiting Treasury approval to accept the shares and equipment. We can then part amicably," the official said, adding: "The equipment is worth more than N$50 million."

It will then be up to the Namibia Industrialisation and Development Agency (Nida) to decide how to use the plant and machinery.

Constrained

Stellantis (formerly PSA) said it had told government it could not compete on equal terms with other vehicle assemblers in the Southern African Customs Union (Sacu) because it did not receive exemptions from normal duties and taxes on vehicle exports from Namibia to other Sacu and SADC countries.

Without a duty remission incentive scheme, the POAN plant could not compete with vehicles from other manufacturers, it said.

The company added that without such sales it would be unable to pay for semi-knocked-down components or cover normal operating costs.

It also claimed that the Namibian government had failed to secure the necessary exemptions for exports to South Africa and other Sacu and SADC members.

Claims of millions owed

The French automaker said it was owed N$79.9 million because of its unrecovered investment.

By June 2024, government had bought only 30 of 150 vehicles assembled at the plant, despite a 2019 Cabinet directive requiring state entities to purchase Peugeot and Opel models made in Walvis Bay.

The 150 vehicles produced over nearly five years fell far short of the original target of 5 000 units a year by 2020.

The first models were the Opel Grandland X and Peugeot 3008, with others planned.

Stellantis announced plans in 2023 to build a new plant in Gqeberha, South Africa – its first in the country – initially to produce the Peugeot Landtrek pick-up, effectively ending the Namibia operation, Reuters reported at the time.