South African officials encour- age Chinese companies to invest and set up factories there In the afternoon of November 24th， the committee held Sino-Africa Auto and Trade Seminar in Johannesburg， marking the beginning of 8th China Auto International(South Africa) Exhibition Tour. At the meeting， officials from South Africa Department of Transporta- tion expressed their hope that Chinese auto companies should invest and set up factories in South Africa， to provide high quality and cheap vehicles to local clients. The official from South Africa Department of Trade and Industry said that though South Africa local auto market is relatively limited， vehicles made in South Africa can be exported to other countries who have trade agreements with South Africa. In this way， besides general auto trade， China and Africa can deepen cooperation and perfect Chinese automotive export and sale network to South Africa. “DTI will provide Chinese auto enterprises with lists of South African companies who are capable of producing auto parts，” said he.South Africa has abundant natural resources， with production of some metals ranking the first in the world. So， mine mining and ores transportation bring great opportunities for China auto enterprises. It is learned that Gauteng， Eastern Cape Town， Kwazulu-Natal and other provinces in South Africa now all have production bases for auto parts， which are preferential choices for Chinese companies. Meanwhile， South Africa has the lowest electricity charge in the world， and the competitive cost including labor， tax， land， rent， transportation and lower living expenses compared to major economic entities.In the morning， officials from South Africa DOT， Department of Economic Development and DTI interpreted policies on auto import for Chinese auto companies. In 2011， South Africa will begin to roll out a 10-year automotive industry development plan. In the decade of 2011-2020， South Africa will have a fixed import tax rate of 20%-25% for auto parts and semi-finished products， while give a government subsidy of 20% to foreign-funded auto factories. If the factory employs more local people， the subsidy rate can go up to 30% of the total investment. For 3.5-ton or heavier truck manufacturers， DTI of South Africa will provide special allowance. In 2013， South Africa will further boost the development plan for automobile industry， mainly by favorable policies for industrial investment enterprises. In Eastern London there will construct multifunctional industrial development zones， including the largest Benz assembly base in Southern Africa， mainly for SKD and parts manufacturing. In 2011， South Africa will also highlight large and medium-sized buses and industrial trucks， to promote the economic development of South Africa. After the meeting， accompanied by leaders of the organizing committee， these officials visited the exhibition of the vehicles of Chinese self-owned brands sold in South Africa. Bright colored Hafei cars， delicately decorated Dongfeng trucks and Foton vehicles all gave a deep impression to South Africans.Local dealers: China automobile is worth its price.Since November 25th， the tour exhibition was held at Joburg， Durban， Eastern London， Port Elizabeth， and finally arrived at Cape Town. During the first day’s drive of 560 kilometers， the auto fleet received warm welcomes by South Africans. And the representatives from participating companies had a deep feeling that Chinese vehicles would embrace a great chance in this country where there is no public transport， and it is urgent to introduce vehicles of Chinese self-owned brands to South Africa， this emerging market with great potential.South Africa is a production base for global right steering vehicles. Benz， BMW， Volkswagen of Germany， Ford of the United States and Volvo of Sweden and other international famous brands all have set up assembly plants and agents in South Africa. Where are the opportunities for Chinese enterprises? On Nov 29th， the fleet finally arrived in Cape Town after 2300 kilometers’ drive， withstanding the tests of various and complex road conditions. In the morning of November 30th， representatives from these exhibiting companies visited Transportation Commission of South African Parliament， and were warmly welcomed by commission chairman. She introduced the development status of South Africa automobile industry in detail. And she said: “At present， the main problem for South African transportation is that the bottom black have no public transport. The governing parties began to develop medium-sized buses that carried such people and have carried out a series of assistance plans. I hope China can take this chance to find their opportunities”.According to a Chinese auto enterprise exhibitor， South Africa vehicle and parts import market is mainly monopolized by German and Japanese companies， with China only takes a share of 6.11%， focusing on low-cost car， pickup and minibus. Affected by the financial crisis， middle to high end vehicles exported to South Africa decreased sharply， while the sale volume of 1.2 L or below cars increased quickly. Now， Hyundai， Honda and Tata and other cars with a price of 70，000 rand or so have a good sale in South Africa， with Hyundai ranked the first， mainly due to the longest postsale service time (5 years or 150，000 kilometers) and comprehensive configurations among similar price-class. Chery， Geely， Great Wall， Changan and other Chinese small cars also develop a certain market share. Take chery for example， Chery completed the related certifications in South Africa in 2007， and made 48-hour endurance record under the supervision of South Africa Racing Association in 2008. Current price for QQ3 (0.8 L) is about 60，000 rand， which is one of the best selling models. However， Chinese companies should pay more attentions to post-sale service and brand establishment， which are the shortcomings for Chinese auto manufacturers to do business in Africa.During the exhibition tour， South African dealers agreed that China automobiles are really attractive， and they think Chinese autos are worthy their prices， compared the European and US. One of the dealers was exclusive agent of chery and Foton in South Africa. This dealer not only has Chinese autos， but also Indian products. The famous brand in India， Tata， was introduced by Imperial to South Africa.Participants in South Africa vehicle assembly industry said， because of higher prices for auto parts from South African supplier， local vehicle assembly companies will change spare parts sourcing channels， and take more from China and other Asian countries. GM South Africa Company clearly expressed that price for the same part from local suppliers are 30% higher for that from Latin America， the MiddleEast and other African countries in average， and even 40% higher than that from Thailand and other countries with lower costs. GM now has moved to some competitive foreign suppliers from weak local suppliers， to reduce production cost. It has been long for China exports engines， gearboxes， cylinder covers， cylinder block， crankshaft， etc. to South Africa， and Chinese products have won trust in auto post-sale market there. As the largest vehicle market in Africa， South Africa will bring great chances to Chinamade vehicles and parts.Chinese Enterprise Exhibitors: new export market for new energy vehiclesComplying with the central government’s energy saving and emission reduction policy， 2010 witnessed a wave of new energy vehicle development in domestic manufacturers caused by LNG， CNG and other clean energy heavy trucks， besides the wide application of new energy technologies in China passenger car industry.During the press conference for 8th China Automobile International(South Africa) Exhibition Tour， Yang Zhigang， head of Shaanxi Automobile Group， said， the group is focusing on development of heavy and commercial electric vehicles， and participating the exhibition tour aims to find future export markets for new energy vehicles in South Africa. During the wave for new energy heavy trucks， the group strengthened its leadership in domestic new energy heavy truck industry. Now LNG/CNG heavy trucks from Shaanxi Automobile Group are the only natural gas heavy trucks with mature technology and in batch operation， taking a market share of 90%. Besides， heavy trucks from the group are exported to Southeast Asian countries.As the widespread of new energy technologies， Shaanxi Automobile Group places “new energy heavy trucks” a major driving force for future development. According to Yang Zhigang， in addition to launching new generation of 2011 “Chijiu” natural gas heavy trucks， the group is developing dimethyl ether commercial vehicles and pure electric heavy commercial vehicles (China 863 Program)， hybrid heavy commercial vehicles (National Science and Technology Support Progrom). China New Energy Heavy Truck Strategic Alliance， initialed by Shaanxi Automobile Group， is considered to further strengthen the group’s leadership in new energy heavy truck sector.“Electric vehicles need comprehensive charging station facilities， so no new energy vehicles were included in this exhibition tour，” Yang Zhigang said. Other Chinese vehicle manufacturers that attended the exhibition also had tasks of finding export opportunities for new energy vehicles， which South Africa can provide， too. During the exhibition tour， officials from South Africa DTI mentioned that South Africa plans an annual production of 1.20 million vehicles after 10 years development in 2020， jumping from 0.6 million per year. To realize the plan， South Africa hopes China auto manufacturers to set up factories there， while introduce new automobile production technologies， such as new energy technologies， in order to lift vehicle manufacturing technical level in South Africa.“In the future， we will consider to export the new energy vehicles to South Africa， but it should wait till relevant accessory facilities are complete， for example the charging station network is mature， ” Yang said.
