The Chinese carmaker Chery has expressed interest in establishing a factory in South Africa.
This is according to the company’s leadership, including Mark Ma, Deputy General Manager of Chery Group SA, Guibing Zhang, President of Chery International, and Tony Liu CEO of Chery Group South Africa.
During a press conference held in Wuhu, China, earlier this year, the brand’s representatives confirmed to the media that the company intends to build a new Research and Development (R&D) centre in our country.
Additionally, it was hinted at that the new R&D centre could pave the way for a full-blown Chery manufacturing plant in South Africa.
While this has not been officially confirmed, the company’s leaders commented that such a possibility is on the cards “if market conditions permit,” once feasibility studies are conducted.
However, it just so happens that the fate of one of South Africa’s existing car factories is currently in doubt, potentially creating an opportunity for Chery to take over as one of the country’s original equipment manufacturers (OEMs).
A factory’s future in doubt
In late May, the Japanese publication Yomiuri reported that Nissan has plans to shutter as many as seven plants worldwide.
The automaker has been facing financial difficulties for several years now, and has been exploring several different strategies to turn its fortunes around.
Earlier this year, Nissan was in talks with Honda regarding a potential merger, but this plan was scrapped in February when negotiations between the companies broke down.
Since then, it’s been revealed that Nissan is evaluating whether to close multiple factories around the world, including sites in Argentina, India, Mexico, and South Africa.
For those who aren’t aware, Nissan has a plant in Rosslyn on the outskirts of Pretoria, which currently manufactures the Navara bakkie.
Nissan South Africa has neither confirmed nor denied the idea that its Rosslyn factory could be closed in the near future.
“Regarding the recent reports on the potential closure of certain plants, Nissan wants to clarify that this news is speculative and not based on any official information of the company,” the automaker previously told BusinessTech.
This brings us back to Chery, which is currently looking to expand its presence in South Africa.
In a recent interview, TimesLIVE asked Tony Lui whether Nissan’s Rosslyn facility may be of interest to Chery.
“SA boasts a proud legacy of local vehicle manufacturing, and Chery is committed to strengthening the industry for generations to come. This would also allow us to enhance our contribution to local communities,” he said.
Lui explained that Chery’s expansion could go one of two ways.
The first option is to partner with an existing manufacturer, while the other would be to establish its own dedicated plant.
Within this context, it’s possible that Chery could partner with Nissan South Africa to address production gaps in its own business.
While Chery only relaunched in South Africa in 2021, the carmaker has rapidly grown to become one of the nation’s top 10 best-selling brands.
Lui explained that Chery’s customer base has reached a critical mass, justifying feasibility studies to assess how local manufacturing could help to secure its long-term goals for our market.
“Beyond market size, SA being the largest new car market in Sub-Saharan Africa, Chery recognises SA’s role as a gateway into Africa through initiatives such as the African Continental Free Trade Agreement,” said the CEO.
Again, it’s important to note that Nissan South Africa has reaffirmed its commitment to our market, and that Rosslyn will remain in the Japanese company’s hands for the foreseeable future.
However, if Nissan South Africa’s parent company does ultimately decide to reduce its presence in our market, it’s worth knowing that a Chinese carmaker may be willing to take over production, saving jobs that may otherwise be lost.
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