8 July 2005
Vehicle manufacturer Fiat South Africa has landed its largest single components export contract.
The company announced on Thursday that it is to export 24 000 catalytic converters – for use in the award-winning Fiat Punto 1.3 JTD MultiJet engine – to Europe every month in a three-year contract worth R700-million.
The contract is a major boost to South Africa’s catalytic converter industry. Last month, Fiat Auto secured a R250-million contract for catalytic converter components, and a R200-million contract for exhaust heat shields.
According to Business Day, its total export contracts are now worth over R1.15-billion.
The three contracts are a substantial boost to the car maker’s component export revenue, the newspaper reports. It’s also good news for South Africa’s car and components export industry, which has taken a knock from rand strength and reduced tariff protection.
South Africa is the largest supplier of catalytic components in the world, National Association of Automotive Component and Allied Manufacturers of SA head Clive Williams said on Thursday. In 2004, converter exports totalled R8.3-billion.
Catalytic converters, which use platinum to help reduce vehicle emissions, are South Africa’s flagship motor industry export, representing 38% of component exports, according to Business Day.
Williams said the total value of component exports was R21.7-billion in 2004.
Fiat SA MD Giorgio Gorelli said on Thurday that there was further potential for export contracts.
He said support from the government’s motor industry development programme (MIDP) was one of the main reasons his company had secured the recent export contracts.
The contracts have made Fiat one of the largest component exporters in the country, and mean the South African arm will become more deeply integrated into Fiat’s global supply chain. They have boosted Fiat’s export revenue and enabled it to earn more MIDP export credits, Business Day reports.
The catalytic converters for the latest export contract will be made by Johannesburg-based Magneti Marelli, a subsidiary of the Fiat group. Production of the converters began in June, and the first shipment will leave South Africa later in July.
Commitment to South Africa
The group added that the deal is further proof of Fiat Auto SA’s commitment to the South African motor industry.
Fiat Auto SA, in conjunction with the company’s Global Sourcing headquarters in Turin, Italy, is continually evaluating the viability of procuring locally manufactured components for use in Fiat and Alfa Romeo products around the world, Business Day reports.
The 1.3-litre MultiJet turbodiesel engine, co-produced by Fiat and General Motors, recently won the International Engine of the Year 2005 in the 1.0 to 1.4-litre category.
The Fiat-designed 1.3-litre diesel engine won the award ahead of the Honda 1.3- litre IMA, Peugeot-Citroen/Ford Diesel 1.4-litre, Volkswagen 1.4-litre FSI, Toyota Diesel 1.4-litre, and Daihatsu 1.3-litre engines.