Cheap Chinese imports likely to put a strain on local car companies

ED RICHARDSON
FROM AS early as August 2007, SA could receive its first Chinese automotive product when the Chana light commercial vehicle arrives. Asian cars will also become more prominent in the local entry-level car market, as two Chinese car manufacturers prepare to introduce two models to the market next year. But fully imported vehicles like these may put a strain on those SA vehicle manufacturers that have already set up factories in the country. “China and India are the emerging global markets and the main competition is expected from these regions in these segments. However, imports are in line with the principles of the Motor Industry Development Programme (MIDP),” explained Norman Lamprecht executive manager of NAAMSA. Tony Twine, motor industry analyst at Econometrix, told Business Report that fully imported Chinese vehicles into the local market could lower new vehicle prices and may even affect the two Indian vehicle manufacturers Mahindra and Tata. But Eastern Cape-based General Motors says that imported vehicles will affect all car companies in South Africa. According to Lamprecht, imports have helped increase competition and improved vehicle affordability. Imported vehicles have also widened the consumer’s choice. Looking at the May 2006 Naamsa sales results, the Eastern Cape’s big three car manufacturers – Volkswagen SA, GMSA and DaimlerChrysler South Africa - continue to dominate the top six positions of the total market sales. But imported models such as Tata and Renault are not far behind.