Oct 14, 2011
FAW South Africa to build $100m truck, car plant in Eastern CapeBack
© Reuse this
FAW SA is a joint venture between a local company and Chinese vehicle manufacturer FAW, which owns the majority share in the local operations. China FAW will provide the funding for the venture.
FAW is number 197 on the Fortune 500 list, and last year recorded $44-billion in turnover, FAW SA MD Richard Leiter tells Engineering News.
FAW last year produced 2.54-million trucks and cars, and manufactures vehicles in China in joint venture with companies such as Volkswagen, Toyota and Mazda.
FAW is also to move to private ownership, and will go public in 2012, says FAW SA GM Liu Xia.
The Eastern Cape plant, which will be located on a 400 000 m2 site, will have an annual capacity of 5 000 trucks a year, ranging from smaller trucks right up to the extra-heavy beasts.
The plant will also produce light commercial vehicles and passenger cars, which FAW does not yet sell in South Africa.
Annual light commercial vehicle and passenger car plant capacity will be 30 000 units a year, and the product range will include single and double half-ton bakkies – more of the workhorse kind than the leisure kind – as well as sedans and hatchbacks.
FAW SA was to unveil its bakkie and passenger car range in South Africa at the Johannesburg Motor Show, which started on October 8, with sales of these vehicles kicking off in early 2012.
Abbas says FAW SA has inked a deal with the Imperial group to distribute the vehicles locally.
FAW SA currently has 18 truck dealerships in South Africa, but wants to grow this footprint significantly, he adds.
FAW SA has been selling trucks in South Africa since 1993, with current assembly, in modest numbers, taking place at its Ekurhuleni plant.
The aim of the new, expanded plant is to service not only the local market, explains Abbas, but also the African market, as well as, eventually, South America.
“South Africa and the rest of Africa are our number one priority. It is a widely held belief in Africa that South Africa has high standards and that it produces reliable, high-quality goods, which is why we chose South Africa as our export base. We believe Africa will be the world’s next growth engine.”
Abbas does not want to divulge local sales volumes.
Leiter notes, however, that Africa is an important market for the company, and that, for example, it delivered 80 buses to Zimbabwe earlier this year.
“We are looking at setting up a dealership in Harare.”
The company already has dealerships in some African countries.
Angolan FAW sales reached around 4 000 units last year.
Abbas says FAW SA has been locked in talks with the Department of Trade on Industry (DTI) on incentives for its proposed investment, but that nego- tiations are ongoing.
The DTI confirms these negotiations.
At its current numbers, the plant’s annual capacity will fall short of the 50 000 units a year required to qualify for incentives under government’s Automotive Production Development Pro- gramme, set to be implemented in 2013.
However, Abbas says the 50 000 unit threshold is “not a problem”.
The first vehicle is expected to roll off the assembly line at the Eastern Cape plant in 2015. The FAW SA Ekurhuleni facility will then become a parts distribution centre.
Edited by: Martin Zhuwakinyu© Reuse this Comment Guidelines (150 word limit)
Other Automotive News
International consulting engineering company Royal HaskoningDHV (RHDHV) has appointed Salani Sithole as South African MD, effective March 1. Sithole has been with the company for six years and, prior to joining RHDHV, held various positions in engineering consulting,...
Recent Research Reports
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
This Week's Magazine
National flag carrier South African Airways (SAA) is in an advanced stage of renegotiating its deal with European airliner manufacturer Airbus to acquire A320 single-aisle (or narrow body) aircraft. The aim is to replace ten of the aircraft still on order with five...
Worldwide, the main thrust in the ports industry over the past decade or more has been to increase efficiency. Traditionally, ports have been run by engineers and mariners and, in the past, increasing a port’s capacity was achieved by expanding the harbour. “That has...
What do you do when an elephant has a toothache? You call Dr Gerhard Steenkamp from the University of Pretoria’s (UP’s) faculty of veterinary science, Onderstepoort, one of only two elephant ‘dentists’ in the world.
The 2015 Sanlam/Business Partners Entrepreneur of the Year (EOY) competition was launched earlier this month in Johannesburg, with the main focus on creating and inspiring entrepreneurs to create jobs and boost the economy.
In a recent letter to the editor that I sent to Engineering News (Concerns regarding South African portion of Square Kilometre Array) and in a follow-up article elaborating further (We must start preparations to build our own synchrotron light source), I stated my...