Korean Media: Chinese Cars Surge to Second Place in South Africa Market, Korean Automakers Face Challenges!
On August 2, South Korea's media outlet The Global Economy published an article stating that with China's largest automaker Chery establishing a production base in Africa, the strategies of Hyundai and Kia have encountered new uncertainties. For years, these two automakers have regarded South Africa as their gateway to entering emerging markets.
It is reported that Chery has recently officially acquired Nissan’s factory in Rosslyn, South Africa, and held a launch ceremony.
Chery plans to retain the current 692 employees’ positions and create approximately 3,000 jobs through direct and indirect hiring in manufacturing, supply chain, and service sectors.
Chery aims to transform the Rosslyn plant into a production, export, and R&D hub for the African region.
At the completion ceremony, Chery announced its plan to develop the Rosslyn facility into an integrated automotive center combining R&D, supply chain management, and employee training, with a target of achieving annual sales exceeding 100,000 units in South Africa.
The initial models to be produced will include the Jetour T Series, Jetec J5, and Chery Tiggo 4 SUVs, among which the Jetec J5 will be available in both internal combustion engine and new energy variants.
After trial production of 15,000 vehicles in the third and fourth quarters of 2027, Chery plans to increase the local content ratio to 40%. The company is also conducting research on potential partner enterprises. The company stated that this investment could eventually scale up to several hundred million dollars.
Chery’s shift toward localized production in South Africa is interpreted as a signal of reconfiguration in the automotive supply chain. Local media reports indicate that Chery has already risen to become the second-largest passenger vehicle brand in South Africa this year. This suggests a rapid transformation in the competitive landscape between Chery and long-established brands such as Hyundai and Kia, which had previously dominated the market.
Some industry experts analyze that, following Southeast Asia and Latin America, Chinese manufacturers are adopting a strategy of establishing localized production systems in Africa to circumvent tariffs and reduce costs.
Some figures in South Korea’s automotive parts industry point out that Chinese companies expanding localized production in Africa and other emerging markets may undermine the export competitiveness of South Korean automakers and their suppliers.
After acquiring the Rosslyn factory, Chery plans to use South Africa as a launching pad to export products to 45 sub-Saharan African countries. The African strategies of Hyundai and Kia, currently lacking local production bases, are expected to face significant challenges.
Original source: toutiao.com/article/1872374521018496/
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