China targets African car export market

The Chinese have big aspirations towards exporting vehicles into the fast-growing economies of sub-Saharan Africa. But it’s no simple case of transporting vehicles there and selling them, according to Ray Levin, operations director of the Imperial Group’s AMH – which imports and markets Chinese vehicles into SA. The Chinese hopes for the southern African region are expressed in a blog carried by the People’s Daily in China. It reads: “China still needs to broaden its export markets beyond Asia. “For a long time Chinese vehicle sales have been constricted to Japan, South Korea and some African countries such as Algeria, Angola, Egypt and South Africa. “Yet the pace at which the sub-Saharan economy is growing presents huge potential for Chinese vehicles. This year, the region’s growth is forecast to accelerate to 5.2%, driven by increasing investment to exploit the natural resources and develop infrastructure.” AMH is not related to the Chinese move into the region. According to Levin, his company’s activities are limited to certain of the Southern African Development Community (SADC) countries. However, he added, there is a move by the SA government for them to build Chinese-model light delivery vehicles (LDVs) in this country – which would be aimed at the sub-Saharan region. But, if China expects to flood the market with its other vehicle categories, it has got a tricky task on its hands, Levin told FTW. “It’s what we call ‘greenfield’,” he said. “People there tend to go for established brands. “So, if the Chinese want to go there, then they need to be thinking of a price premium, otherwise they’ll struggle.” And he’s not just talking about enough off a car’s price to buy your wife a new dress either. The figure 20% came up in his conversation. “They’d also need to develop a regional network of dealers, parts and supplies and sales if they want to make a go of it,” Levin said. “It’s a huge problem.”