The world's largest maker of luxury vehicles, Bayerische Motoren Werke (BMW) AG had decided to stop expanding in South Africa after labor issues resulted to losses in export contracts.

Thousands of automotive workers in South Africa had launched a strike in the hopes of obtaining a raise in their salaries. The prolonged labor strike had cost some major carmakers ZAR20 billion or USD2 billion in lost revenue. This was according to the National Association of Automobile Manufacturers of South Africa, or Naamsa. Naamsa also said the strike had also affected Toyota Motor Corp and Volkswagen AG, among others.

In a phone interview, Naamsa director Nico Vermeulen said, "One of the main risks is that a prolonged strike will damage South Africa's reputation and track record as a reliable supplier to international markets. To be a reliable supplier, you need labor stability."

Nomura International Plc economist Peter Attard Montalto said about BMW's investment withdrawal in an email to clients, "BMW has clearly had enough of the labor situation and the risk/reward of further investment simply doesn't make sense for them. There are many other companies thinking the same thing because of labor issues."