In the land of the brave
FAW South Africa (FAW SA) has proved that it deserves a place in the local and broader African market, and is now ready to write the next chapter in this story.
Over the last few decades, there have been many Chinese entrants to the South African market keen to claim their place and have a share of our pie. Many have come, some have stayed and others have gone, but FAW SA is one Chinese manufacturer that has stood the test of time.
With a local presence stretching back two decades, the company has proved its commitment to the market, as well as its product offering, and is now almost set to enter the next chapter in its African saga – the opening of its assembly plant in the Coega Industrial Development Zone near Port Elizabeth.
Originally announced in 2012, the decision to construct the plant was not one that was taken lightly, explains FAW SA director Richard Leiter: “We could have gone to Kenya, or Tanzania where FAW has been for over 30 years – but in the end we chose South Africa because of the infrastructure. It then came down to a choice between East London and Coega.”
In the end Coega was chosen because, as Leiter says, “the infrastructure is just absolutely tops”. Come June, and the first-phase, 30 000 m2 plant – complete with training facilities – will allow the company to provide its African client base with 5 000 vehicles a year.
“From here, we’re going to export mostly to Angola, Zimbabwe, Zambia and the Democratic Republic of Congo (DRC). This is all on the heavier stuff, not the little ones,” he enthuses. “The little ones”, or the models up to around eight tonnes, are much more popular on the South African market than they are further north where, Leiter explains, the much heavier models are preferred.
And there is room for all these new vehicles, too – FAW’s African and South African markets being extremely positive. “Further up in Africa even more so than here,” Leiter notes. “The South African market will probably increase by about 10 percent, and we expect to take market share. But Africa is increasing at around 25 percent!
“The markets have to grow, and we will grow,” he says with a confident smile. (The company has, in fact, been growing at around 20 percent per annum for the last 20 years and is today ranked at 141 on the Fortune Global 500 list.)
Not only is this confidence and growth reflected in the Coega plant, it’s also evident in the infrastructure development FAW is placing into its dealer network; beginning right at home with the company’s Isando head office. This new 2 500 m2 building will form the new base for the company’s activities on the continent. It includes a training centre. An additional new 1 700 m2 state-of-the-art truck showroom is being built right next door, too! “The new IT infrastructure will also link the head office with China, the Coega plant and all the branches. It will be the centre of everything,” says Leiter excitedly.
In addition, the company is revamping and expanding its Cape Town branch, placing its Pinetown branch under the knife and expanding its footprint with a few joint venture operations. In total, six new dealers will join the existing 29 in the short-term.
So, big investments are definitely the name of the game for FAW at the moment – the Coega project alone has injected about R600 million into the economy. It has already created 280 jobs, with an additional 500 lined up.
“The last four years were bad but we’re out of it now, so it is certainly the right time for us to expand. We’ve also proved that we’re not ‘fly-by-nighters’. There have been a lot of Chinese companies here, many have left and there are definitely a lot more coming,” says Leiter.
He’s not worried, though. And it’s easy to see why.