Full steam ahead for South Africa’s new R3-billion car factory

South Africa is getting a R3-billion car factory, which is expected to start production by early 2026.

The brand-new facility is the brainchild of Stellantis, which plans to use the area to manufacture bakkies to supply South Africa and various international destinations.

The company recently announced that progress has been made on the site’s construction, as the development of the building platform is now underway.

Progress update

Stellantis, for those who are unfamiliar, is one of the world’s largest carmakers by volume and represents at least eight different brands in South Africa including Abarth, Alfa Romeo, Citroen, Fiat, Jeep, Maserati, Opel, and Peugeot.

The company first announced its intention to construct a factory here in early 2023, though details were initially sparse regarding what it would make, given its extensive line-up across its various marquees.

Since then, Stellantis has confirmed that the new site will construct the Peugeot Landtrek bakkie, making it the seventh locally made pickup after the Toyota Hilux, Ford Ranger, Isuzu D-Max, Mahindra Pik Up, Nissan Navara, and VW Amarok.

The factory, which is located in the Coega Special Economic Zone outside Gqeberha in the Eastern Cape, first began development in May 2024 with the 320-hectare site being prepped for development.

This involved an environmental impact study of the surrounding areas and the relocation of all of the site’s flora and fauna.

More recently, construction began on the building platform, which will be shortly followed by the appointment of the main contractor for the top structure once all registration conditions have been met, according to Construction Safety.

Coega Executive Manager of Business Development, Asanda Xawuka, also confirmed that all regulatory approvals have been received, including the Department of Employment and Labour’s work permits and Site Development Plan approvals from the local municipality.

“The project is receiving support from the Department of Trade, Industry, and Competition (DTIC); hence service providers have been appointed as mentioned above, with funding duly approved by the DTIC earlier this year,” she said.

“Other conditions yet to be fulfilled include the finalisation and registration of the JV company and conclusion of agreements between the JV partners and newly registered company and Coega.”

Photo of the cleared work site for the new Peugeot Landtrek factory in the Eastern Cape. Credit: Construction Safety.

Why South Africa is getting a new vehicle factory

Stellantis is currently trying to expand its presence in the Africa and Middle East (MEA) region, and South Africa was selected as the ideal candidate to supply this market.

This is reflected in the choice of vehicle the automaker went for, as the Peugeot Landtrek is a midsize bakkie comparable to something like the Hilux or Ranger.

“Based on the strong and consistent automotive policy and the well-established pickup component supply base in South Africa and potential of the pickup market in Africa, we felt South Africa is ideally suited for our new industrial operation in the region,” said Deidre Du Plessis, Head of Corporate Communications at Stellantis South Africa.

Consequently, around 40% of the models produced at Coega will be for our market, while the remaining 60% will be exported to other countries around the MEA.

Admittedly, the Landtrek has not been an especially popular entry compared to its peers until now, but Peugeot is planning to expand the model’s appeal with the introduction of new units.

At present, the French bakkie is only sold in two upmarket double-cab specifications, but this will soon be joined by more affordable double and single-cab workhorse iterations intended for the commercial sector.