xinhuaAlineofSasukaminibusesbyBAICSouthAfricaawaitingdeliveryWith29millionvehiclesmanufacturedjustlastyear,anda3.2-percentyear-on-yeargrowth,Chinaremainstheworld’slargestcarmanufacturer.Forthepastfiveyears,Chineseautomakershavebeenpickingupspeed.Localbrandsnowaccountfor60percentofallsalesofsportsutilityvehiclesinthecountry.Overall,homegrownautomakersnowsellnearly50percentofallvehiclessoldinChina,accordingtostatisticsreleasedbyChinaAssociationofAutomobileManufacturers(CAAM).ButastheChineseautomobileindustryisstrugglingwithanincreasinglysaturatedmarketathome,carmakersarelookingabroadfornewopportunities.
AgrowingnumberofChineseindigenousbrandshavesoughttoseteyesontheAfricanautomobilechessboard.FromGreatWallMotorstoCheryandGeely,thereisalonglistofChinesecarmanufacturersthathavelaunchedcarandtruckassemblylinesonthecontinent.Themostrecentannouncement,fromBYDAuto,isoneofthemostemblematic.China’sgiantelectriccarbuilderlaunchedanambitiousprojectinCasablancatomanufactureelectricvehicleslastDecember.Ultimately,anindustrialfacilitywillbeestablishedona50-hectareareanearTangier,innorthMorocco,whichwillproducebatteries,electriccars,busesandtrucks,aswellaselectricmonorailwagons.
ThisdevelopmentwasrecentlyconfirmedbyinternationalmarketingresearchcompanyNielsen.Itsglobalconsumptionsurveyoncarbrandsshowsthatmorethan40percentofcarconsumersinMexico,ChileandEgyptwillconsiderbuyingChinesebrandswithinthenexttwoyears.Africais,therefore,poisedtobecomeoneofthemostpromisingmarketsforChineseautomakers,saidZhangZhenhua,VicePresidentoftheautomotivedivisionforNielsenGreaterChina,duringtheEighthChinaAutoForumheldrecentlyinBeijing.
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MajorChineseautomakersarerushingtoAfricabecausethecontinenthasanumberofadvantagesoverothermorecompetitivemarkets,saidZhangZhiyong,anindependentautoindustryanalyst.“InAfrica,theautomotiveindustryisstillinitsinfancy.Leadingcarmultinationals’footholdintheregionisnotascomplexasintheChinesemarket,whichhasalreadymatured.Investingonthecontinentis,therefore,areasonablechoiceforChinesecarmanufacturers,”hetoldChinAfrica.
Lowerintensitycompetitiongoeshandinhandwithapotentiallylargemarket.AccordingtoananalysisbytheFrenchInstituteforDemographicStudiespublishedinSeptember2017,theAfricancontinent’spopulation,whichwas1.2billionin2017,willreacharound2.5billionin2050.TheUnitedNationsChildren’sFundforecaststhatbytheendofthe2030s,Africa’surbanpopulationisexpectedtooutpacethenumberofruraldwellers.Suchdemographictrendsandthecontinent’seconomicgrowthfuelthehopethatamiddleclassofconsumerswillemerge,saysZhaoRen,anindependentinvestmentadvisorontheAfricanmarket.Thenumbersseemtosupportthisidea:AccordingtoareportfromconsultingfirmIHSMarkit,thevolumeofcarsalesinAfricaisexpectedtodoubleby2027.
Politicalsupportisalsopickinguppace.TheEgyptianGovernment,amongothermeasures,hassubsidizedgasolineconsumptionandcontinuouslyreducedroadtransporttariffsandcustomsdutiesonimportedcarsandautoparts.Foritspart,theSouthAfricanGovernment,whichseestheautomotiveindustryasapillarofthecountry’seconomicgrowth,hasbeenpursuingpoliciesthatfavorthedevelopmentofthedomesticautomarket.Oneofthekeymeasuresistobanimportsofsecond-handvehiclesthatfailtomeetbasicsafetyandenvironmentalstandards.
AnothermajoropportunitypresentedwasatthesigningofanagreementinMarchwhichwasexpectedtopavethewayforthecreationoftheAfricanContinentalFreeTradeArea.Tariffsonintra-AfricantradewillgraduallybephasedoutinordertofacilitatetradeforAfricancompaniesonthecontinent,saidtheAfricanUnion.Previously,duetoitsdissuasivecustomsbarriers,Africaremainedanoverlyfragmentedmarketunabletoputforwardaglobalstrategy.Thefreetradeareameansthisproblematicsituationiscomingtoanend.
xinhuaAtechnicianworksontheChinesebrandJACvehicleinEgyptNotwithoutafewcaveats
Everyopportunitypresentsachallenge.Africancustomersoftencomplainaboutthelackofafter-salesserviceofChinesebrands.AnalystZhangZhiyongfindsthisquitenormal.
“ThesearetheprevailingchallengesintheChineseelectriccarmarket:Whenthesizeofthemarketissmall,theafter-salesservicenetworkwillnotbeasdevelopedasyou’dexpectittobe,”hetoldChinAfrica.Hesuggestedthatasthemarketmatures,Chineseautomanufacturersintendtograduallyestablishnewafter-salesservicenetworksorstrengthenexistingonestoimprovecustomersatisfaction.
Otherchallengesemergefromthecompetitionoftraditionallypredominantbrands,mostlyFrenchandJapaneseones.Tocopewiththis,Chinesemanufacturersoftentrytoleveragetheirvalue-for-moneyadvantage.ZhangZhenhuapointedoutthatascomparedtothesamecarmodelsproducedbywell-establishedmultinationals,Chinese-brandedcarsperformbetterintermsofappearance,interiordecorationandconfiguration,withalowerpricetag.
Agoodmarketadaptationstrategy,therefore,hasaroletoplay.ChinesebrandBeiqiFotonMotordiscoveredthatdifferentmarketshavedifferentneeds.Forinstance,whenitcomestobuses,Chinesepassengersaremoredemandingintermsofcomfortandairconditioning,whileinSouthAfrica,consumersprioritizecapacity.Giventhisdifference,theChinesemanufacturertookoutairconditioningsystemsandinstalledluggageracksinsteadtoimprovebaggagecapacity.ThismodificationwaswellreceivedbyitsAfricanconsumers.
Anothertrumpcardisthedevelopmentofelectricvehicles,whichmeetstheneedsofmanycountriesintermsofenvironmentalprotection.Inthisrespect,BYDhassetagoodexample.ThefirmhasinvestedheavilyinMoroccoaspartofthegovernment’sinitiativetobuildindustrialecosystemsinautomotiveandaeronauticssectors.Needlesstosay,suchinvestmentwaswelcomedwithopenarmsbylocalauthorities.AsMoulayHafidElalamy,theMoroccanMinisterofIndustry,Investment,TradeandDigitalEconomy,said,“ThisprojectenablesMoroccotodevelopnewformsoftransportcombiningtheefficiencyandrespectfortheenvironment,puttingthecountry’sdynamicworkforceatthecoreoftheglobalmarket.”
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