China, SA State-owned vehicle plant to be established in $800m investment
The Industrial Development Corporation (IDC) and Beijing Automotive Group Corporation Limited (BAIC) intend to establish a new vehicle manufacturing facility in South Africa, in a $800-million investment, excluding land and buildings, says IDC spokesperson Mandla Mpangase.
The plant will produce passenger vehicles, multipurpose vehicles, bakkies and sports-utility vehicles for South Africa, Africa and other export markets. Around two-thirds of production will most likely be exported.
The project will start up with an initial capacity of up to 50 000 units a year, ramping up to 100 000 units a year, says Mpangase.
He says the IDC and BAIC are yet to sign a memorandum of agreement that will formalise the cooperation between the two State-owned enterprises, with production set to start in the next two to three years.
The new production facility will create around 2 500 direct jobs.
Mpangase says the automotive industry accounts for around 7% of South Africa’s gross domestic product (GDP).
“Adding another similarly sized [manufacturer] to the South African industry could push this figure to 8% of GDP, especially taking into account that the contribution by the mining industry is reducing.”
Mpangase says the focus on exports means that the production facility will have to be placed at the coast.
“This immediately implies either KwaZulu-Natal – Durban or Richards Bay – or the Eastern Cape – East London or Port Elizabeth.”
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