China’s BAIC ready to make SA in­roads

IN­DUS­TRY NEWS/ Af­ter a slow start and no test-drives pol­icy, the com­pany is set to grow its African foot­print, writes De­nis Droppa

Business Day - Motor News - - COMMERCIAL NEWS -

Af­ter a num­ber of im­ported Chi­nese car brands have come and gone rather swiftly (among them Geely, Ch­ery, Hafei and Chana), and have of­ten demon­strated dodgy build qual­ity and safety stan­dards, South African con­sumers are un­der­stand­ably wary of ve­hi­cles from that coun­try.

It makes launch­ing a new Chi­nese brand in this coun­try chal­leng­ing, but BAIC (pro­nounced “bike”) has com­mit­ted to an R11bn in­vest­ment in build­ing a semi knock­down (SKD) ve­hi­cle assem­bly fa­cil­ity in Port Eliz­a­beth’s Coega dis­trict.

“We have heard a lot of neg­a­tive feed­back about Chi­nese brands, con­cern­ing prod­uct qual­ity and also the fact that a num­ber of them have left the coun­try,” ad­mits Kane Du, mar­ket­ing man­ager of BAIC SA In­vest­ment, from the com­pany’s head of­fice in Lin­bro Park near Jo­han­nes­burg. But he is hop­ing Bei­jing Au­to­mo­tive In­ter­na­tional Cor­po­ra­tion’s ma­jor in­vest­ment im­plies a firm that will be around for a while.

“We have had good pub­lic re­ac­tion to our ve­hi­cles at mo­tor shows, and our in­vest­ment in the assem­bly plant also builds trust,” he says.

At a tour of the new Coega-based plant in July, BAIC’s in­ter­na­tional chair­per­son Xu Heyi an­nounced that the fac­tory, in which the In­dus­trial De­vel­op­ment Cor­po­ra­tion (IDC) has a 35% stake, would pro­duce cars for SA and ex­port.

UN­VEIL­ING

The first BAIC ve­hi­cle to be as­sem­bled in Africa rolled off the pro­duc­tion line at that event. The ve­hi­cle, an X25 com­pact SUV, was un­veiled via live video link by South African pres­i­dent Cyril Ramaphosa and Chi­nese Pres­i­dent Xi Jin­ping, to hun­dreds of guests in­clud­ing po­lit­i­cal and busi­ness lead­ers.

In the largest au­to­mo­tive in­vest­ment in SA in four decades, the fac­tory’s ini­tial an­nual ca­pac­ity will be 50,000 units, later ex­pand­ing to 100,000 ve­hi­cles, with 40% for the lo­cal mar­ket and the rest for ex­port to Africa, the Mid­dle East and Latin Amer­ica.

The ini­tial pro­duc­tion will be on an (SKD) ba­sis, and later on a knocked­down (CKD) ba­sis.

There have been strike-re­lated pro­duc­tion de­lays at the Coega plant, but full-scale pro­duc­tion of the X25 is ex­pected to com­mence early in 2019, to be fol­lowed later by assem­bly of pas­sen­ger cars and light trucks.

Head­quar­tered in Bei­jing and at the Turin Styling Cen­tre in Italy, with pro­duc­tion bases all

It was a start, but not quite enough to make a de­fin­i­tive judg­ment on the ve­hi­cle, but af­ter re­peated re­quests BAIC has now agreed to loan us an X25 for a week-long road test later this month. On pa­per the 1.5l petrol com­pact SUV seems an at­trac­tive deal with a com­pre­hen­sive level of equip­ment and a com­pet­i­tive price, rang­ing from R219,990 to R249,990 for the four-model range. Look out for our road test in Novem­ber for a com­pre­hen­sive as­sess­ment.

An­other key fac­tor in build­ing cus­tomer trust is backup sup­port, and BAIC plans to ex­pand its cur­rent net­work of 17 mul­ti­fran­chise deal­ers to 20 by the end of the year and 40 by the close of 2019, says Kane. All the ve­hi­cles come with fiveyear/120,000km war­ranties.

Kane would not re­veal BAIC sales fig­ures in SA to date and the brand doesn’t sub­scribe to Naamsa, but a phone-around of deal­ers re­veals the ve­hi­cles have trick­led out of show­rooms very slowly thus far.

“Our first phase was to in­tro­duce lower-priced prod­ucts, but cars that have bet­ter qual­ity and safety than peo­ple are used to from Chi­nese brands,” says Kane. “In the next few years we will launch new, more pre­mium prod­ucts here.”

These in­clude the BJ40L, an all-wheel drive SUV with a strik­ing re­sem­blance to the Jeep Wran­gler, and the BJ80 SUV which is a clone of the Mercedes G-Class.

INI­TIAL AN­NUAL CA­PAC­ITY WILL BE 50,000 UNITS, LATER EX­PAND­ING TO 100,000 VE­HI­CLES, WITH 40% FOR THE LO­CAL MAR­KET

Right: A BAIC X25 on show at the Coega fac­tory sod­turn­ing cer­e­mony in 2016. Left: Up­com­ing BAIC mod­els to be launched in SA in­clude the BJ80 medi­um­sized SUV.

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