Made in South Africa

It seems that more and more Chinese vehicles are entering the African market, which comes as no surprise. They might have started as the butt of automotive jokes, but are progressing to a force to be reckoned with (striking fear in the hearts of manufacturers the world over) … This vigour, however, will gain a South African flavour as FAW has opened a production plant in Coega.

First Automotive Works (FAW) is no stranger to the South African market as it has been in the country since 1994 … The company has now taken things to the next level, investing around US$ 60 million (more than R635 million) in the South African economy through its newly built vehicle production plant, in the Coega Industrial Development Zone (IDZ) in the Eastern Cape.

“FAW has been in our market for 20 years, providing passenger and commercial vehicles,” explained President Jacob Zuma at the official opening of the plant. “However, your decision to locate the production facility in Coega is a most welcome vote of confidence in Nelson Mandela Bay and in the Eastern Cape Province,” he told the manufacturer.

Rob Davies, the Minister of Trade and Industry, who joined the festivities, added that this is the largest investment made by any Chinese investor in South Africa. “This is the culmination of a journey, that our department has been engaged with for some years, to bring a Chinese automotive manufacturer to the Coega IDZ,” he pointed out.

Originally announced in 2012, the decision to construct the local FAW plant was not one that was taken lightly, explained FAW Vehicle Manufacturers South Africa: “We could have gone to Kenya or Tanzania, where FAW has been present in sales and service for over 30 years – but in the end we chose South Africa because of the infrastructure.”

Qin Huanming, vice president of the China FAW Group Corporation, added: “As a shining pearl on the African continent, South Africa enjoys sound political, economic and legal systems, as well as excellent infrastructure and abundant labour resources. These favourable conditions have strengthened FAW’s confidence to invest in South Africa.”

The local affiliate explained that it then came down to a choice between East London and Coega. “In the end Coega was chosen because the infrastructure is perfect,” said Richard Leiter‚ managing director of FAW South Africa.

Zuma added that the US$ 60-million investment will create much needed jobs and promote an improvement in the lives of many people in this area. “The investment also augurs well for South Africa’s position within the global automotive manufacturing network and proves, once again, that we have an attractive operating environment to host global multinational companies.”

The total investment has been financed by the China FAW Group Corporation and the China-Africa Development Fund. “FAW has chosen the right continent on which to invest at this point in global economic history,” said Zuma. “It is home to some of the fastest growing economies in the world and there remains greater potential for further growth as the volume of goods transport increases.”

The first-phase of the Coega plant, covering 103 000 m2 of land and a 28 000 m2 plant – complete with training facilities – will supply trucks to the South African market, as well as to the rest of Africa, in both right-hand and left-hand-drive derivatives.

The current projections are that 40 percent of production will be destined for the South African territories, while 60 percent will be exported. Production will be ramped-up to 5 000 trucks per annum (with 35 000 passenger vehicles to be manufactured here in the second phase).

Davies added that FAW’s decision to build commercial vehicles locally from completely knocked down kits (CKD), the first original equipment manufacturer (OEM) to do so across its entire range in South Africa, is a clear indication that government’s plan to extend the Automotive Production Development Plan to the commercial vehicle CKD manufacturers, bus manufacturers and local component manufacturing industry, will attract further expansion in the automotive industry.

The FAW range to be assembled locally includes 14 models spanning the medium-, heavy- and extra-heavy commercial vehicle segments.

Future plans include the commissioning of a body-building facility at the Coega plant where tipper-truck bodies, mixers and customised trailers will be built. This plant won’t serve FAW exclusively, as it will be the first South African-based OEM to offer its body-building facility to other commercial vehicle manufacturers.

Zuma said it best: “Today, opening the FAW plant here in Coega, is a remarkable example of the positive cooperation that we, as South Africans, can attract from foreign investors. We warmly welcome FAW’s decision to assemble its vehicles locally. We wish you success, growth and prosperity, which will translate to growth and prosperity for workers, their families and the local economy.”