China threatens local auto industry’s Africa markets

THE AFRICAN market represents a vast untapped market which South Africa is in danger of losing to the East, according to speakers at the first South African Automotive Week “Wheels into Africa” conference held in Port Elizabeth from October 3-5. Gavin Maile, executive partner KPMG Industrial, Automotive and Pharmaceutical Division, urged the local auto industry to “take control” of the African market ahead of competitors from the East. China is one of the main threats to the local industry as Chinese manufacturers for the first time have an excess capacity of some 1.5 million vehicles. Africa is seen as a prime market for the excess vehicles, evident from the large number of new Chinese brands introduced to South Africa in the past year. Growth prospects for Africa are positive, as the continent is the only one in the world for which a higher economic growth rate has been forecast for 2007, added Jorge Maia, head of Research and Development at the Industrial Development Corporation of SA in his presentation on trade and trade patterns into Africa. This provides a number of opportunities for exporters of vehicles and parts.