SA is in talks with Chinese carmakers to encourage them to invest in local production, with one manufacturer showing strong interest in building cars locally, Trade, industry & competition deputy minister Zuko Godlimpi said on Wednesday.
Africa’s most developed car manufacturing hub is at an inflection point, with a drop in domestic output and a surge in imported vehicles, mostly from China.
Competition is intensifying, meanwhile, with the likes of Toyota and Volkswagen vying for market share against electric vehicle producer BYD as well as Chery, Great Wall Motor and Beijing Automotive Group (BAIC).
Godlimpi told MPs that discussions were under way with several Chinese carmakers to manufacture in SA instead of exporting them to the country.
“One area of their interest is to invest in hybrid vehicles and electric vehicles because that is the market that they are servicing globally,” Godlimpi said.
One Chinese company had talks with the trade and industry department in August and expressed an interest in establishing operations in either East London or Gqeberha, he said.
To escape pressure from a damaging price war in their home market, Chinese carmakers are expanding into Africa in search of profits. BYD and Chery are among about 15 Chinese car brands active in SA, with Geely, Leapmotor and Changan set to join them soon.
SA is also reviewing its tariff regime as it seeks to protect the sector from low-cost imports.
“We’ve also been trying to move up to the highest ceiling of import duties to make sure that cheap imports do not price out SA-manufactured cars,” Godlimpi said, adding that such changes took time to implement.
Reuters
