South Africa is emerging as a strategic hub for China's automotive industry in Africa, as Chinese automotive manufacturers expand their global manufacturing footprint to include the African continent.
With the operations of companies like BYD and Chery gaining ground across Africa, the relationship is evolving from consumption to production, presenting a challenge to legacy brands globally. South Africa's market is already shifting away from Western and Japanese brands toward fast-growing Chinese ones.
BAIC led China's manufacturing push into South Africa in 2016. Since then, investment has surged. Chery, a top-three passenger vehicle manufacturer in China, has made a bold move to take over Nissan's struggling Pretoria plant, with the potential to add 3000 jobs.
"They are looking by 2027 once everything is up and running to produce at least 50,000 units a year. This is not bad. This creates opportunity, creates employment, but also downstream industries that are, whether it's the tire industry, whether it's the auto manufacturers and support industries that come along with this, this is a major, major advantage and it creates confidence in the sector," said Rodney Genga, professor of Materials and Manufacturing Engineering of the University of Witwatersrand.
BYD, the world's largest maker of new energy vehicles, is also gaining ground in South Africa. While local manufacturing is not yet on the cards, it is helping drive the shift to cleaner mobility.
"We need to invest in dealerships. Very strong, very high quality dealer stores here. And then this will indirectly maybe help to create close to 2,000 job opportunities here. And the second we will invest in charging infrastructure. That is very important. I think we need to have this kind of foundation for our next step," said Stella Li, executive vice president of BYD.
That confidence is being echoed locally as South Africans begin to anticipate bigger investments from China's car makers.
"If we partner correctly with China, which is the biggest automotive, renewable energy vehicle country in the world today in terms of what they've done in terms of industrializing, and partner very strategically where the investment into whatever new technology is developed here, we become co-developers of that with a clear focus on the region," said Genga.
South Africa emerging as central hub for China's automotive expansion in Africa
