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Building a new model for the globalization of Chinese independent automakers

2016-09-02

Foundation laid for BAIC Group's first overseas vehicle plant in South Africa

On August 30, 2016, the foundation laying ceremony of BAIC South Africa plant, a project of BAIC Automotive Group Co., Ltd. (BAIC Group) and Industrial Development Corporation of South Africa Limited (IDC), was held at the Coega Industrial Development Zone, Nelson Mandela Bay, Eastern Cape Province, South Africa. Witnessed by Mr. Xu Heyi, Chairman of BAIC Group; Dr. Dong Haiyang, President of BAIC International; Mr. Irving Penn, Director of East Asia & South Asia, South African Rand Investment Bank and other executives, the foundation of BAIC South African Plant was laid. In the future, the plant of BAIC SA in Coega will promote the development of the local economy and society, and inject new vitality into China's cooperation with South Africa and Africa.

BAIC Group and IDC hold a 65% stake and a 35% stake in BAIC South Africa Plant respectively. The project will be constructed in two phases. In Phase 1, three workshops (welding, painting, final assembly) will be built with a planned output of 50,000 units by 2022. In Phase 2, a stamping workshop will be built, and the existing three workshops will be expanded and reconstructed based on capacity and technology demands, with a total planned annual output of 100,000 units. In the future, BAIC's passenger vehicles, off-road vehicles, light-duty trucks and other automotive products meeting market demands manufactured here will not only be sold in South Africa, but also be exported to southern Africa, Europe and Oceania. Phase 1 will contribute 60 percent of exported vehicles. The project will create some 13,000 direct and indirect jobs, the industrial added value of vehicles and parts will reach some 18.6 billion yuan( 2.86 billion USD)at full capacity, and the project will achieve exports of some 6.2 billion yuan(0.954 billion USD) to South Africa.

Previously on November 16, 2015, Mr. Malinga, Divisional Executive, Mining and Manufacturing Industries at IDC and Mr. Xu Heyi, Chairman of BAIC Group held talks and reached the intent on building a plant in South Africa. On December 2rd, 2015, witnessed by Chinese President Xi Jinping and his South African counterpart Jacob Zuma, Mr. Xu and Mr. Mvuleni Geoffrey Qhena, CEO of IDC signed an MOU on building BAIC South African Plant with an annual output of 100,000 units and a total investment of 800 million US dollars (some five billion yuan). After going into production, the project is expected to be a plant with the largest lump-sum investment in South Africa and Africa.

In recent years, BAIC Group has adhered to "group-based" development, integrated its various business resources, advanced the globalization strategy and endeavored to achieve the grand goal of "BAIC globalization". As an important step to go global, BAIC will improve its capabilities of vehicle R&D, manufacturing and quality control based on the South African manufacturing base, increase the sales of new vehicles and used vehicles on the basis of automotive finance, and develop the South African base into a base manufacturing both left-hand drive and right-hand drive vehicles and extending from South Africa to other key African markets. Supported by South Africa's preferential international bilateral and multilateral trade agreements, the plant will radiate Europe, Oceania and other markets, become a regional operation and management center outputting products, technologies, management, talents and finance, offering local vehicle consumers more diversified experiences, and presenting better automotive products to local consumers.


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