Peugeot plant enters care and maintenance
The PSA Automobiles SA assembly plant in Walvis Bay is currently under care and maintenance, pending the outcome of discussions between government and the French automaker to determine its future.
The plant was placed under care and maintenance after the French automaker took legal action against government for its inability to allow it to compete competitively in the southern African market, effectively leading to its failure.
The French automaker sued government for N$80 million, but the matter has now been struck off the court roll.
"The plant is currently under care and maintenance, meaning it’s not in production at the moment, pending the court case. The next stage is for the shareholders to get into arbitration mode to determine the future of the plant," deputy executive director in the ministry of industrialisation, Michael Humavindu, said.
Unable to compete
PSA said it informed government that it could not compete on an equal footing with other vehicle assembly plants in the Southern African Customs Union (Sacu) because it did not seek exemption from normal duties and taxes levied upon the export of vehicles from Namibia and SADC member states, including Namibia.
Without the implementation of the duty remission incentive scheme, the Peugeot Opel Assembly Namibia (POAN) was unable to compete against vehicles supplied by other vehicle manufacturers, it said.
The company further claimed that without such sales, the plant would be unable to pay [PSA] for the semi-knocked-down vehicle components supplied to POAN, while also being unable to continue its normal operating expenses in the ordinary course of POAN’s business.
"In addition, POAN is still unable to export such vehicles to South Africa on a free trade basis as the [Namibian government] failed to ensure the required exemption of all excises and custom duties, taxes or levies in relation to the export of vehicles to South Africa and other country members of the Sacu and SADC areas," PSA said.
Claims of millions owed
According to the French automaker, it is owed N$79.9 million as a consequence of its unrecovered investment in Namibia, made up of initial share capital injected to the value of N$17 million, research and development costs to the value of N$14 million, and unpaid invoices totalling N$48.9 million.
As of June last year, only 30 of 150 vehicles had been bought by government, as per a 2019 Cabinet directive that all government entities must reserve their vehicle purchases for Peugeot and Opel cars assembled at Walvis Bay.
The 150 vehicles assembled in nearly five years are a drop in the ocean compared to the annual targeted volume of 5 000 units by 2020, as promised by shareholders at the time.
The Opel Grandland X and Peugeot 3008 were the first outputs from this factory, while other products were meant to follow.
The plant was placed under care and maintenance after the French automaker took legal action against government for its inability to allow it to compete competitively in the southern African market, effectively leading to its failure.
The French automaker sued government for N$80 million, but the matter has now been struck off the court roll.
"The plant is currently under care and maintenance, meaning it’s not in production at the moment, pending the court case. The next stage is for the shareholders to get into arbitration mode to determine the future of the plant," deputy executive director in the ministry of industrialisation, Michael Humavindu, said.
Unable to compete
PSA said it informed government that it could not compete on an equal footing with other vehicle assembly plants in the Southern African Customs Union (Sacu) because it did not seek exemption from normal duties and taxes levied upon the export of vehicles from Namibia and SADC member states, including Namibia.
Without the implementation of the duty remission incentive scheme, the Peugeot Opel Assembly Namibia (POAN) was unable to compete against vehicles supplied by other vehicle manufacturers, it said.
The company further claimed that without such sales, the plant would be unable to pay [PSA] for the semi-knocked-down vehicle components supplied to POAN, while also being unable to continue its normal operating expenses in the ordinary course of POAN’s business.
"In addition, POAN is still unable to export such vehicles to South Africa on a free trade basis as the [Namibian government] failed to ensure the required exemption of all excises and custom duties, taxes or levies in relation to the export of vehicles to South Africa and other country members of the Sacu and SADC areas," PSA said.
Claims of millions owed
According to the French automaker, it is owed N$79.9 million as a consequence of its unrecovered investment in Namibia, made up of initial share capital injected to the value of N$17 million, research and development costs to the value of N$14 million, and unpaid invoices totalling N$48.9 million.
As of June last year, only 30 of 150 vehicles had been bought by government, as per a 2019 Cabinet directive that all government entities must reserve their vehicle purchases for Peugeot and Opel cars assembled at Walvis Bay.
The 150 vehicles assembled in nearly five years are a drop in the ocean compared to the annual targeted volume of 5 000 units by 2020, as promised by shareholders at the time.
The Opel Grandland X and Peugeot 3008 were the first outputs from this factory, while other products were meant to follow.
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