(Reuters) – Beijing Automotive Group (BAIC) South Africa will start assembling its newly launched B30 off-road SUV at its factory in the country’s Eastern Cape province as early as January, its CFO said, marking a significant step in boosting local production.
To offset pressure from a damaging price war in their home market and as Europe and the United States tighten trade restrictions on Chinese car manufacturers, China’s automakers have turned to Africa as a key focus market.
BAIC (1958.HK), opens new tab, BYD (002594.SZ), opens new tab and Chery are among about 18 Chinese car brands active in South Africa.
BAIC’s Gqeberha plant in the Eastern Cape province currently assembles the BAIC B40 Plus and Beijing X55 Plus SUV models.
BAIC South Africa Chief Financial Officer Anele Geza told Reuters at the launch event on Monday evening that the new B30 combustion engine and hybrid models will be assembled locally using a completely knocked-down production process. This assembles cars from many small parts, with increased local content.
The current models are made using a semi-knocked-down process, which assembles vehicles with large, partially assembled and imported components into a complete car.
Multinational automakers that have South African factories – including Toyota (7203.T), opens new tab and Ford (F.N), opens new tab and their suppliers- have been advocating for increased local production by newcomers in order to preserve the domestic auto industry and nudge the country closer to its plan to produce up to 1.4 million vehicles by 2035 and increase local content.
Yang Yixin, the CEO of BAIC South Africa, told delegates at the launch of the BAIC B30 that the company was firmly committed to developing in South Africa.
“We will continue to introduce more new models while steadily expanding local production and value creation,” he said.
($1 = 17.3125 rand)
