- South Africa is negotiating with Chinese firms to assemble cars locally.
- Interest shown in hybrid and EV production in East London, Port Elizabeth.
- The government is reviewing tariffs to protect industry from cheap imports.
A senior government official stated that South Africa is negotiating with Chinese automotive companies to promote their investment in domestic manufacturing, with one producer expressing significant interest in assembling vehicles locally.
Africa's leading car manufacturing center is at a crucial crossroads, experiencing a decline in local production and an increase in vehicle imports, predominantly from China.
Competition is becoming fiercer, as Toyota and Volkswagen compete for market share against electric vehicle manufacturer BYD, along with Chery, Great Wall Motor, and Beijing Automotive Group (BAIC).
Deputy Minister Zuko Godlimpi of Trade, Industry & Competition informed parliament members that talks are ongoing with various Chinese car manufacturers to produce their vehicles in South Africa rather than bringing them in.
"One area of their interest is to invest in hybrid vehicles and electric vehicles because that is the market that they are servicing globally," Godlimpi said.
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A Chinese firm discussed with the trade and industry department in August and showed interest in setting up operations in either East London or Port Elizabeth, he stated.
To avoid the strain of a detrimental price war in their domestic market, Chinese car manufacturers are venturing into Africa in pursuit of profits. BYD and Chery are part of around 15 Chinese automotive brands operating in South Africa, with Geely, Leapmotor, and Changan expected to join them shortly. South Africa is examining its tariff system to safeguard the industry against low-cost imports.
"We've also been trying to move up to the highest ceiling of import duties to make sure that cheap imports do not price out South African-manufactured cars," Godlimpi said, adding that such changes take time to implement.