Moving Forward
Chinese carmakers
still to make a dent in SA market
When the first Chinese made vehicles arrived for sale
sales service which ultimately damages the reputation of
in our market some years ago, they found that SA had
Chinese cars in countries such as South Africa, where cus-
already been flooded with a range of European and
tomers are very brand loyal and dragging them away from
the strong established brands will require a monumental
Japanese brands. Since then they have struggled to
market shift. Generally the tactic of Chinese car companies
establish a strong footprint as they compete against
has been to launch their star model first and then introduce
strong Western, Indian, and Japanese rivals.
I
a range later.
This approach has worked well for some companies, but it is
n traditional business processes seen with most international car companies, they usually go through the following phases: They export their products, create local
assembly facilities with skd or ckd parts supply, setup
local production facilities and finally create R&D centres.
just as important to set up proper marketing networks and
a spare parts system. Some Chinese car companies have
claimed that South African customers have yet to embrace
Chinese manufacturers but one cannot deny that a huge gap
still exists between Chinese and Western car manufacturers.
The big brands such Toyota, VW, Mercedes and BMW are
The Chinese automotive industry has been the largest in the
way ahead of their Chinese counterparts especially in South
world since 2008 in terms of number of vehicle produced.
Africa, having made the journey to Africa many years ago
China produces more than 18million vehicles annually and
and invested billions of rands in their manufacturing plants
although Chinese brands are yet to generate the income from
and brand building. One of the biggest challenges Chinese
Africa as they anticipated, they cannot ignore a market that
car exporters face is that they pay too little attention to after
has 54 countries and 700million people.
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• logistics in action • october 2014