Is South African manufacture on the eventual horizon for Chinese vehicle brands GAC and JMC? Local MD Leslie Ramsoomar says multinational auto group Salvador Caetano Auto, which imports and distributes the brands in South Africa, is open to the idea.
Salvador Caetano, a Portugal-based group specialising in vehicle assembly, distribution and components, sells vehicles in 31 African countries, including South Africa. It is also active in South America and Europe. Among other products, it builds the Toyota Land Cruiser 70 Series in Portugal, primarily for export to Africa. Toyota and GAC have a joint venture in China.
Ramsoomar is MD of Salvador Caetano Auto South Africa and GAC Motor South Africa. He admits that current sales volumes of GAC cars and JMC bakkies are well short of numbers required to justify local assembly, but projected growth could make it feasible — particularly given Caetano’s African network.
Ramsoomar is the former MD of Stellantis South Africa, where he was involved in discussions about local assembly of Peugeot vehicles and other group brands, which include Citroën, Fiat, Opel and Jeep.
Stellantis subsequently announced plans for a R3bn Eastern Cape plant to build Peugeot bakkies, but construction has been delayed by changing market dynamics, including the incursion of Chinese brands.
It is something that might interest us eventually, but the problem is in finding partners
— Leslie Ramsoomar
Before the investment was announced, Stellantis also considered sharing in a multibrand plant that would build vehicles for multiple companies, allowing them to share costs. It’s an option that Ramsoomar says could be feasible for GAC and JMC.
Any assembly plant for cars and bakkies must build at least 50,000 vehicles annually to be economically feasible and qualify for the full range of government incentives. That is a big ask for nascent companies. For some years, the Industrial Development Corporation has been touting the idea of a plant shared by about five companies, each of which would need to produce only 10,000.
Interest has been limited. Ramsoomar says: “It is something that might interest us eventually, but the problem is in finding partners. We have discussed it, but we need collaboration with others.”
The government’s threat to impose import duty penalties on brands, mainly Chinese, accused of dumping new vehicles in South Africa could encourage the process, but there is little sign of it yet.
Other Chinese companies have announced standalone assembly plants. BAIC has a plant near Gqeberha and Chery is about to take over the Nissan plant in Rosslyn, Tshwane.
GAC initially concentrated on upmarket vehicles but is branching out into other segments. Its recently announced Emzoom range will take it into the sub-R400,000 market for the first time. Other products, including a bakkie and a large SUV, are due to follow.
Ramsoomar says that with so many new Chinese brands entering the South African market, it is hard to differentiate brand images. “In the same way that Renault, Peugeot and Citroën were once perceived as ‘French’ rather than as individual entities, I think many consumers have tended to group Chinese brands together,” he says. “But some of us have started to establish clear identities.”
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