How many Chinese car brands do you recognize?
Today I was reading an article on the Chinese imported cars versus the locally manufactured cars n South Africa. What was interesting is the article gave the same Chinese model car price in China vs the imported retail price in SA. We know there will be a slight difference due to import tariffs.
A slight difference you would expect, but double is kind of nuts yet for the equivalent locally manufactured Toyota with similar specifications the Chinese still come out cheaper by 30-60% which tells you everything. The Chinese have doubled their market share in 4 years from 18% in 2020 -37% in 2024.
Chery as a company I know very well considering I was offered the rights to South Africa back in 2006 along with a well known cell phone brand. Back then these companies were not the companies we see today and why I did not accept the offers. Chery was under another manufacturing conglomerate name called HRBF industries and they made anything from a golf cart to a Renault or BMW plus large coaches/buses. These brands have now grown within the last decade and the other legacy brands we know better pay attention fast.
South Africa has manufacturing plants in South Africa for a few leading brands like BMW, Mercedes and Toyota which they export into Europe. The export figures are down 37% which reading between the lines reveals how quickly the Chinese are disrupting the automobile markets globally.
Tariffs are there to protect the local manufacturers and not to earn extra profits through opportunist greed. Toyota in SA should be comfortably selling their vehicles far cheaper than the Chinese ad if they cannot something is seriously wrong with the manufacturing process and knowing the efficient Japanese it is the profit margins being the problem.
Toyota complained the SA government was not protecting local manufacturers enough and they need to change their business model to stay in business as the market will chew the up and spit them out if they think they are a special case. The taxi industry is a Toyota controlled monopoly in SA and the when and not if the Chinese launch a competitive people carrier because this will happen next.
BMW in SA as already said they will supply local cars cheaper to compete against the Chinese and believe if they do not do this they will not have any local business within 5 years. The market place is changing that fast and expect to see a Chinese auto plant in SA once one of the bigger manufacturers shuts down. There is talk of a Chinese EV manufacturer coming to SA so I guess this will happen fast. The raw materials are here so this makes far more sense.
I do not like having less competition as once the Chinese dominate the market their prices will rise. This is the same modus operandi they did with global manufacturing in the 80's and 90's and it is like the world did not pay attention.
Posted Using INLEO
