Belt & Road in Africa: Chinese car maker explores continent's markets
Updated 13:25, 23-Aug-2019
Now we continue with our Belt and Road Africa series. Beijing Automotive Industry Corporation, one of China's five major automakers, has set up a production line in the eastern Cape province of South Africa, at the Coega special economic zone. The facility will be fully operational by the end of the year, and is expected that 50-thousand vehicles will roll off the line when in full production. The company has a joint venture with South African funder, the Industrial Development Corporation. Angelo Coppola has more.
The Fortune 500 company launched their third vehicle to motoring journalists in August in Johannesburg. The B40+ is a four wheel drive vehicle. And there are plans to produce more passenger vehicles, sport utility vehicles, light commercial vehicles and trucks for the local and export marketers.
YE ZHENGMAO VP, BAIC "BAIC is an enterprise that emphasizes integrity, attaches importance to sincerity, has the strength and seeks innovation, with the most open attitude and thinking. BAIC will make an unremitting effort for the mutual benefit and win-win trade and economic cooperation of China and South Africa. BAIC will make a greater contribution to initiate the Belt & Road program."
For the IDC the investment opportunity made complete sense. BAIC joins the other seven big international auto brands that have production facilities in South Africa.
WILLIAM SMITH DIVISIONAL EXECUTIVE, HIGH IMPACT & REGIONS, IDC SA "It's an export opportunity, for South Africa, earning foreign exchange, job creation, its new capacity in the auto sector. We want to grow the auto sector to be be more world competitive. So that's why we were very interested as IDC to co-invest with them."
One of the challenges facing the global marque is adhering to the country's black economic empowerment rules. Which is difficult to do for any of the original equipment manufacturers. It's in the component sector where the work will be done.
WILLIAM SMITH DIVISIONAL EXECUTIVE, HIGH IMPACT & REGIONS, IDC SA "Around these OEMs you've got the local component manufacturers set up. And that's massive. And that's where really where we want to see the BEE happening. The black industrialists, the youth the women owned, and we are making huge inroads in that."
There are ambitious future plans for the manufacturer, who is planning 50 000 vehicles in phase one.
WILLIAM SMITH DIVISIONAL EXECUTIVE, HIGH IMPACT & REGIONS, IDC SA "We want to go into the whole continent. We've got the free trade agreement on the go now, so we want to export these vehicles and then maybe we can move into a phase two where we can get to 100,000 vehicles per annum. Which is the ultimate goal for us to get to."
YE ZHENGMAO VP, BAIC "South Africa is a place where BAIC has placed high expectations and hopes. We are looking forward to playing a role in South Africa."
ANGELO COPPOLA JOHANNESBURG, SOUTH AFRICA "At four and a half billion rand this is the biggest single greenfield investment in auto sector in the past forty years. And it augurs well for that sector and for consumers who have more choice. I'm Angelo Coppola for CGTN in JOHANNESBURG, SOUTH AFRICA."