The new Foton Tunland G7 could become even more competitively positioned in South Africa once it enters local production in 2026.
At present, while the bakkie is one of the most attainable of its kind on the market at a starting price of R319,900 for the single-cab derivative and R399,900 for the double-cab, it remains an import and is therefore not as wallet-friendly as it can really be.
Imported vehicles attract substantial levies in South Africa, encompassing Value Added Tax (15%), Ad Valorem Tax (calculated on a per-vehicle basis, capped at 30%), CO2 emissions tax (2.5-6%), and import duties (25% or 18% if imported from EU).
Value Added Tax is an indirect tax on the consumption of goods and services in the economy and is one of the most significant revenue generators for national government.
Ad Valorem Tax is described as a luxury excise tax that exponentially increases with the price of the vehicle. It is an additional income stream for Treasury derived from the sale of goods deemed luxuries rather than necessities, and levels the playing field between low and high-income individuals as the latter generally pays more Ad Valorem Tax.
Meanwhile, CO2 emissions tax, implemented in 2010, is one of the government’s policy instruments to combat global warming by “stimulating a low-carbon economy.” The levy increases with the amount of fuel a vehicle consumes, thus compensating for its impact on the environment.
Import duties then apply to most goods delivered to South Africa from other countries and are intended to protect local companies that may be competing in the same sector from predatory pricing practices.
Together, these surcharges account for anywhere between 18% and 42% of the price of the vehicle as it stands on showroom floors, as calculated by Naamsa The Automotive Business Council.
Once the Foton bakkie enters production in South Africa, it will no longer be subject to import duties which could see as much as 25% slashed from its price tag come 2026.
It’s unlikely, however, that the entire cost-savings will be realised, as the Chinese automaker will have to recoup its investment into a domestic factory one way or another.
Lighthouse market
Foton is hedging its bets on Africa and sees Mzansi as a “lighthouse market” that will function as a foothold from which it can expand into the rest of the continent.
In this endeavour, the Chinese company said it will establish “five major centres” within our borders over the next eight years comprising a research and development facility, operations centre, manufacturing plant, service training centre, and accessory distribution hub.
Foton is owned by Beijing Automotive Industry Corporation – or BAIC for short – another Asian brand with a presence in the domestic market.
In fact, BAIC is the first Chinese manufacturer that established a factory within our borders in partnership with national government, which started pumping out the Beijing X55 crossover in early 2024.
Render of the BAIC South Africa factory. Source: The People’s Map of Global China
It is this same facility which Foton intends to contract to produce its Tunland G7.
As we speak, BAIC is steadily expanding its manufacturing plant, adding new production lines and other subassemblies in preparation for the bakkie.
The vision is to produce the Tunland in South Africa for the entire African market with plans in place to grow output to as many as 100,000 units a year.
Foton also has ambitious goals to take the region’s bakkie market by storm, something an even more affordable competitor will certainly help to achieve.
This year, its target is to surpass 3,000 sales in South Africa, by 2028 it wants to do 18,000, and by 2032 it aims to hit 40,000.
For Africa as a whole, Foton is eyeing an aggregate of 20,000 sales in the 2023/2024 financial year, increasing to 40,000 by 2026, 60,000 by 2028, 80,000 by 2029, and 100,000 by 2030.
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