Ford retrenchments in South Africa tied to UK tax shift, lower volumes
The South African arm of Ford Motor has attributed the planned retrenchments to lower European orders for its Ranger pickup truck, driven by recent tax changes in the UK and sluggish export volumes for its plug-in hybrid Ranger model.
Last month Ford sent an official notice to unions, notifying them of its intention to retrench 474 workers at its Silverton car manufacturing plant in Pretoria and Struandale engine plant in Gqeberha.
Ford exclusively produces the plug-in hybrid Ranger for global exports, mainly Europe. It also produces the internal combustion engine Ranger for the local and export markets.
Neale Hill, president of Ford Motor Company Africa, told Reuters on the sidelines of an auto conference on Wednesday that the company has been forced to scale down, following a drop in demand for its Ranger.
In the UK, from the start of April 2025 double-cab pickups with a payload of one tonne or more have been reclassified as passenger cars rather than commercial vans for tax purposes, making them more expensive to own.
"As a consequence of that, people have unfortunately reduced their volume. So that's had a big impact in terms of our European orders," he said.
Adding to the pressure are the low volumes of Ford's plug-in hybrid Ranger.
"We haven't seen the plug-in hybrid Ranger hit the volumes that we've been looking for," Hill said. "It's an expensive vehicle, plus, we are not getting to the European originating content, which then makes it able to go into Europe duty-free."
Hill added that volume for South Africa is still stable and probably increasing slightly.
Ford's plant has a capacity of 200,000 vehicles annually but at the moment it is not utilizing all of it.
"Currently this year will be about 100,000 and the installed capacity at capable volume is 140,000. That's what we'll keep going forward," Hill said.
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