China’s BAIC ready to make SA inroads
After a slow start and no test-drives policy, the company is set to grow its African footprint, writes Denis Droppa
After a number of imported Chinese car brands have come and gone rather swiftly (among them Geely, Chery, Hafei and Chana), and have often demonstrated dodgy build quality and safety standards, South African consumers are understandably wary of vehicles from that country.
It makes launching a new Chinese brand in this country challenging, but BAIC (pronounced "bike") has committed to an R11bn investment in building a semi knock-down (SKD) vehicle assembly facility in Port Elizabeth’s Coega district.
"We have heard a lot of negative feedback about Chinese brands, concerning product quality and also the fact that a number of them have left the country," admits Kane Du, marketing manager of BAIC SA Investment, from the company’s head office in Linbro Park near Johannesburg. But he is hoping Beijing Automotive International Corporation’s major investment implies a firm that will be around for a while.
"We have had good public reaction to our vehicles at motor shows, and our investment in the assembly plant also builds trust," he says.
At a tour of the new Coega-based plant in July, BAIC’s international chairperson Xu Heyi announced that the factory, in which the Industrial Development Corporation (IDC) has a 35% stake, would produce cars for SA and export.
The first BAIC vehicle to be assembled in Africa rolled off the production line at that event. The vehicle, an X25 compact SUV, was unveiled via live video link by South African president Cyril Ramaphosa and Chinese President Xi Jinping, to hundreds of guests including political and business leaders.
In the largest automotive investment in SA in four decades, the factory’s initial annual capacity will be 50,000 units, later expanding to 100,000 vehicles, with 40% for the local market and the rest for export to Africa, the Middle East and Latin America.
The initial production will be on an (SKD) basis, and later on a knocked-down (CKD) basis.
There have been strike-related production delays at the Coega plant, but full-scale production of the X25 is expected to commence early in 2019, to be followed later by assembly of passenger cars and light trucks.
Headquartered in Beijing and at the Turin Styling Centre in Italy, with production bases all over China, BAIC Group has about 90,000 employees and produces passenger and commercial vehicles.
Gaining market trust in a new brand also requires access to the product, and after an initially shaky start BAIC has become a little better at exposing potential customers to its vehicles in SA.
When BAIC held a press conference to unveil the imported D20 budget hatchback and sedan range in SA in April 2017, members of the media were able to sit inside the car but no test drives were offered.
Since then the brand exhibited at the SA Motoring Experience show at Kyalami in September last year, where it offered the public and journalists a chance to sit in the passenger seat of its newly-launched, imported X25 while the vehicle was driven around the track.
It was a start, but not quite enough to make a definitive judgment on the vehicle, but after repeated requests BAIC has now agreed to loan us an X25 for a week-long road test later this month. On paper the 1.5l petrol compact SUV seems an attractive deal with a comprehensive level of equipment and a competitive price, ranging from R219,990 to R249,990 for the four-model range. Look out for our road test in November for a comprehensive assessment.
Another key factor in building customer trust is backup support, and BAIC plans to expand its current network of 17 multifranchise dealers to 20 by the end of the year and 40 by the close of 2019, says Kane. All the vehicles come with five-year/120,000km warranties.
Kane would not reveal BAIC sales figures in SA to date and the brand doesn’t subscribe to Naamsa, but a phone-around of dealers reveals the vehicles have trickled out of showrooms very slowly thus far.
"Our first phase was to introduce lower-priced products, but cars that have better quality and safety than people are used to from Chinese brands," says Kane. "In the next few years we will launch new, more premium products here."
These include the BJ40L, an all-wheel drive SUV with a striking resemblance to the Jeep Wrangler, and the BJ80 SUV which is a clone of the Mercedes G-Class.