The Chinese Revolution in South Africa

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kingr
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The Chinese Revolution in South Africa

Post by kingr » Thu Oct 10, 2019 8:50 am

Introduction

The South African car market is a tough nut to crack, just ask GM who pulled out the iconic Chevrolet brand after decades of sales. Over the years many Chinese car brands have also tried their luck, but none has come close to rivaling the established brands that dominate the South African car landscape.

For a new player to succeed in the crowded South African playing field they have to bring their A-game with good quality products at a great price and meet international safety standards. It goes without saying that cars also have to look good. This is where Chinese car brands have failed in the past. They get the pricing right, but motorists are skeptical about reliability and safety. By introducing old models to South Africa, Chinese car brands have also lost customers who don’t like the outdated styling.

Recently there has been a resurgence of Chinese car brands in South Africa with Baic Cars opening up a local plant, and Haval being marketed in a big way. The marketing can be out of this world, but consumers and companies know that products speak for themselves and it can take years to build a reputation. There’s no reason why these brands can’t take off in South Africa as long as they get their products right. After all, there was a time when people thought Korean brands like Hyundai and Kia were inferior to established brands like VW, Toyota, and Nissan. They now dominate the motoring landscape thanks to their quality and reputation.

How fast do Chinese cars depreciate?

At the moment Chinese cars experience heavy depreciation compared to many established brands. This is to be expected with new products with an unknown reputation. Resale value is also based on supply and demand, and right now the demand for the Chinese brands isn’t very high. On the other hand, buyers take much less of a knock when it comes to depreciation because they save on the initial purchase due to the affordable pricing. It’s easy to find out the depreciation rates for any car with our Car Book Value tool.

Baic - Beijing Automotive International Corporation

Models currently sold in South Africa
  • · D20 Hatch: R149 990 – R189 990
  • · D20 Sedan: R209 990
  • · X25 SUV: R219 990 – R249 990
Baic Cars have shown commitment to South Africa by opening a plant near Port Elizabeth. They currently offer three competitively priced products in South Africa, the D20 hatch, D20 sedan, and the X25 SUV. The plant will start off by making the Baic X25 SUV with the plan to export 60% of the production and keep the remaining 40% for the local market. They also expect to start assembling passenger cars and light trucks in the future.

While many might question the reputation of Baic cars since they are unknown in South Africa, they are one of China’s top car manufacturers and own a 5% stake in German motoring giant Daimler. They also manufacture the Mercedes C-Class and E-Class for the Chinese market, as well as several Hyundai models including the Elantra and ix35.

Despite the high hopes, it will be hard to convince customers to part with their cash to buy a D20 hatch at almost R150 000 when it is in the same competitive segment as the Toyota Aygo at R174 900, Datsun Go at R154 000. The X25 takes on cars like the Renault Sendero at R189 900 and Ford Ecosport at R266 100. Both the D20 and X25 come with a 5-year/120 000 km warranty.

GWM – Great Wall Motors
Models currently sold in South Africa
· M4: R177 400
· Steed 5 single-cab: R164 900
· Steed 5 double-cab: R184 900 – R224 900
· Steed 6 double-cab: R289 900

GWM cars have been around in South Africa since 2007 and are mainly known for the Isuzu-based Steed, an affordable, no-frills workhorse. GWM is the largest SUV and pickup maker in China with plants in Iran, Russia, and many other countries. In South Africa, they market their bakkies under the GWM brand name and their SUVs under the Haval brand name. The M4 SUV is listed on the GWM site but is also known as the Haval H1.

Despite its utilitarian approach, the Steed was well-received and proved itself in a tough market. The new face-lifted Steed 5 is a bit more refined with electric windows, USB, and electrically adjustable side mirrors. At a price of R164 900, it is cheaper than the Nissan NP200 and has a larger loading area. The Steed 5 double-cab goes between R184 900 and R224 900 and the Steed 6 goes for R289 900. These prices are far lower than most mainstream bakkies with the Mazda BT-50 starting at R471 100, the Nissan Navara starting at R489 700, and the Toyota Hilux at R405 400. The M4 has a tougher task at R177 400 because it has to take on the Renault Kwid at R140 900 and Ford Ecoboost at R266 100. If GWM can maintain their reputation for reliability there’s no reason why they can’t take on some of South Africa’s big guns thanks to their affordable pricing. GWM vehicles come with a 5 year/100 000 km warranty.

Geely
Models currently sold in South Africa
  • · GX2: R112 990
  • · GC2: R92 990
  • · Emgrand: R164 990
Geely is one of the companies that previously failed to crack the South African market and is back for a second try. They entered the country in 2007 but due to the issue with the local imported closed their doors two years later. Geely cars were then resurrected by another distributor and have been plying their trade with questionable results ever since.
Geely means “lucky” in Chinese and is another company that’s spreading its wings by acquiring other car brands. It bought over Volvo from Ford and also has a controlling stake in British sports car manufacturer Lotus.

The GC2 at R92 990 and the GX2 at R112 990 are two of the cheapest cars available in South Africa and even undercut the Baic D20 at R149 990 and Renault Kwid 1.0 expression at R134 900. At R164 990 the Emgrand is also cheaper than any other sedan in South Africa and is cheaper than budget hatches like the VW UP at R180 900 and Toyota Aygo at R174 900 when it comes to price

All the Geely cars have going for them is price, as the looks and features are certainly nothing to write home about. At the end of the day, you get what you pay for and the Geely cars are basic and have questionable reliability and quality. They come with a 3 year/100 000 km warranty.

Haval
Models currently sold in South Africa.
  • · H1: R184 900
  • · H2: R264 900 – R324 900
  • · H6: R244 900 – R264 900
  • · H6C: R334 900 – R404 900
  • · H9: R609 900


Haval is the SUV brand of GWM and has caused a stir in South Africa with its affordably priced SUV range. Since its arrival in 2017, the brand has experienced positive growth with good sales figures. Unlike the GWM products, the Haval range is more advanced with more modern looks and up to date features. Haval has gone all out to attack the local SUV market with multiple model ranges competing in different segments. The entry-level H1 that competes with crossovers like the Renault Duster, while the H2 takes on cars like the Kia Sportage and Mazda CX-5. The H6 and H9 take on larger SUVs like the Toyota Fortuner and Prado. Haval seems to have taken a leaf out of the Koreans book by offering well-rounded, inexpensive products that are loaded with features. The H9 comes with technology including navigation, keyless entry and ignition, and Bluetooth connectivity.

Time will tell if Haval cars manage to get a permanent foothold in South Africa, but they have gotten off to a great start. Haval cars come with a 5 year/100 000 km warranty.

Honourable Mentions

These are just some of the Chinese car brands trying to get a grip on the South African market. Other notable mentions include JMC, Chery, Foton, and FAW.

Conclusion

It’s not possible to paint all the Chinese car brands with the same brush as they each target different segments and have different quality. Some of the products are crude and in dire need of refinement, while others are modern and offering fantastic value. If they can deliver great products at the right price there’s no reason why they can’t succeed. If they can’t do that, they will fall to the wayside like many other brands that couldn’t make the cut in South Africa. The Korean brands were once the underdogs, and so were the Japanese brands before them. Considering the rate of advancing technology it’s only a matter of time until the Chinese upstarts catch up and maybe even surpass them. Either way, competition drives quality up and reduces pricing, which can be good for the South African consumer.

Wheel Index has the latest in automotive news and information. Our VIN number check and Car Book Value tools help countless South Africans make the right choice whether buying or selling a car and we have a panel of experts ready to answer any of your motoring questions.
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