Massive boost for car assembly sector
Chinese firm makes record investment
A CHINESE state-owned car manufacturer agreed to build an R11 billion car assembly plant in South Africa, the biggest investment in a vehicle-production facility in the country in four decades.
The Beijing Automotive International Corporation (BAIC) plans to start production at the facility in 2018, international chief executive Dong Haiyang said in Port Elizabeth yesterday.
The plant will be built in partnership with South Africa’s state-owned Industrial Development Corporation (IDC), and have a capacity of 100 000 units a year by 2027, he said at the industrial development zone where the factory will be located.
Greenfield “South Africa’s automotive industry has received a major shot in the arm with the announcement of the biggest greenfield investment in 40 years,” a joint statement said.
The announcement comes as a boost for South Africa’s car manufacturing industry, which has been among the bright spots of an economy expanding at the slowest pace since a recession in 2009.
The government’s car incentive programme has attracted companies including Toyota, Ford and BMW to set up and invest in factories.
The industry has the potential to boost production by almost 50 percent to more than 900 000 vehicles a year by 2020, the local producers’ group said in May.
About 60 percent of the BAIC’s South African plant’s output would be earmarked for export, initially to east, west and north Africa, Dong said. Vehicles could be sent to Europe at a later date, he said. The project will create more than 2 500 jobs, according to the joint statement.
The Port Elizabeth facility was BAIC’s first integrated car manufacturing plant outside its home market, Chairman Xu Heyi said. The company was China’s fourth-largest car maker by sales, and manufactures models including Foton and BBAC, it said. It also has partnerships with Mercedes-Benz and Hyundai in its home market.
“South Africa is not the only place” that BAIC planned to start manufacturing vehicles, Wei Huacheng, a company executive, said. “There are some other places we are considering. We have got ongoing projects.”
The South African plant would responsible for the production of 50 000 units a year after the initial development, the companies said.
That will double during the second stage. BAIC plans to produce four models at the site. The Chinese company will own 65 percent of the project, with the balance taken by IDC. – Bloomberg