Italian company Iveco has formed a 60-40 joint venture with local firm Larimar Group to manufacture trucks and buses in South Africa, the companies announced on Wednesday.
The joint venture company, Iveco South Africa Works, will build a R530-million manufacturing facility near Rosslyn outside Pretoria with an annual production capacity of 7 000 trucks and 1 000 buses and a workforce of around 1 000 employees.
The plant will assemble light, medium and heavy-duty commercial vehicles as well as front-engine and low-floor city buses, the companies said in a statement, with production due to start in 2014.
"This joint venture is targeted to serve both the local market, which is one of the most prominent in the region, as well as all the other neighbouring countries federated within the Southern African Customs Union," Iveco CEO Alfredo Altavilla said in the statement.
Iveco Africa and Middle East regional head Luca Sra, speaking to Engineering News at the Truck and Bus Show in Johannesburg on Wednesday, said that local manufacturing was a key element in the company's Africa growth strategy.
Sra said that localisation in South Africa would make Iveco eligible for municipal bus tenders, improve the group's competiveness and help it to tailor products for local needs.
The Larimar Group was "honoured to enter into a partnership with Iveco and contribute to Iveco's growth in Africa," said Larimar MD Franco Pisapia. "We are proud to contribute to this joint venture our manufacturing experience in South Africa and specifically our knowledge of the bus market and of bus bodywork manufacturing."