Vehicle manufacturer Great Wall Motor Company Limited of China (GWM) has announced that it will enter the South African market directly, by granting distribution rights to Haval Motors South Africa (HMSA), a wholly owned subsidiary of GWM.

GWM made this decision following the expiry of the distribution agreement with GWM South Africa (GWM SA), HMSA MD Charles Zhao tells Engineering News Online.

GWM SA was owned by a number of private investors. JSE-listed transport logistics and mobility company Super Group in 2014 acquired a 50.1% stake in the business for an undisclosed amount.

GWM SA started distribution of GWM vehicles in 2007, establishing more than 60 dealerships and selling over 50 000 vehicles, mostly pickups, into the South African market.

However, GWM SA has struggled increasingly in the domestic market.

The company sold 6 545 units in 2011, or an average of 545 units a month. Sales reached 340 units in May 2014, 231 units in May 2015, and 100 units in May this year.

HMSA says the “strategic decision” to invest directly in the South African operation “is confirmation of the importance attached to the long-term future of the GWM brand in the region”, which plays an important part in “GWM’s international expansion strategy”.

The company hopes to “maintain and grow GWM’s position as the most successful Chinese brand in Southern Africa”.

“Going forward we will continue to distribute vehicles, offer parts and service support, as well as administer warranties through the already established dealer network,” notes Zhoa.

HMSA will distribute both GWM and Haval products.

GWM also produces the Haval brand.

The GWM badge refers mainly to bakkies, while the Haval brand includes compact, medium and large sports-utility vehicles (SUVs), explains Zhoa.

In 2015, GWM China sold 850 000 vehicles worldwide. In China, GWM has been the best-selling pickup for 18 consecutive years, and the best-selling SUV for 13 consecutive years.

HMSA will introduce the Haval brand to South Africa, says Zhoa, adding to the GWM products already on the market.

“We would like to make Haval a great success in South Africa.

“However, the economy and exchange rate in South Africa are not favourable at the moment, so we are studying the market to launch Haval at an appropriate time.”