Automakers will then become a motor assembler only. However, both Nissan and Fiat are expected to set up separate marketing companies for their respective vehicles. Nissan SA has been restricted in its export potential because of a franchise agreement with Nissan Japan, which precludes it from selling in certain markets. Although it is able to export to certain African countries, a direct investment by the Japanese company would allow Nissan SA access to markets where it is not already represented. The export credits earned from increased sales overseas should assist the group in maintaining its competitive pricing structure.
Exports are vital for the survival of all local manufacturers.
A tie-up would also provide innovation in technology. Fiat is keen to increase its model range in South Africa. A more detailed statement from the company is expected on Tuesday. Rumours of the deal were welcomed by the market, which pushed the price of the shares up to 350c on Friday from 204c on Wednesday before settling back to a close of 330c. The shares peaked at 650c in January last year.