FAW trucks make inroads in Africa

African truck dealers are enjoying shorter lead times and reduced costs by sourcing from FAW's plant in South Africa.

FAW Vehicle Manufacturers South Africa, a subsidiary of the Chinese automaker, is receiving an increased number of orders from traders who traditionally imported vehicles and parts from outside the region.

Time-to-market has become the biggest advantage, says Cheng Zhang, marketing and strategy manager for FAW South Africa. "Customers can get their vehicles within 30 days of their order - much faster than from China, which normally requires three months."

In terms of costs, buyers can also save import duties of up to 40 percent, he adds.

In February, the company shipped at least 10 FAW tippers to Tanzania, which is a member of the South Africa Development Cooperation initiative. "Being in the same regional bloc and in the African Union are advantages that come with import-export duty agreements," Zhang says.

FAW China, a Fortune 500 company and one of China's largest automakers, spent $41.9 million to set up its assembly plant in the Coega Industrial Development Zone, near Port Elizabeth, in July 2014. The company is selling in almost all righthand-drive countries in Africa, "but we also want to assemble lefthand-drive vehicles to spread our reach", Zhang says, adding that the company regularly considers which of its medium, heavy and extra-heavy trucks are feasible to build locally.

However, he says, keeping products affordable is a key strategy. "It remains in our interest to keep our production plant simple and maintain the highest level of quality, rather than pursue huge production diversity without adequate up-skilling, which could see us lose the focus of our strategy to provide quality products at fair prices."

FAW China was the first original equipment manufacturer to build its entire range of commercial vehicles in South Africa. It is estimated that 40 percent of production is bought in the local market, with 60 percent exported.

lucymorangi@chinadaily.com.cn

(China Daily Africa Weekly 03/04/2016 page27)