BAIC’s invest in South African vehicle assembly project to boost investment

Chinese vehicle manufacturer Beijing Automotive Group’s (BAIC’s) decision to invest in a vehicle assembly plant, in the Coega Industrial Development Zone (IDZ), could help attract further investment by Chinese firms in South Africa.

According to Thandukwazi Nyawose, the economic counselor of South African Embassy in Beijing, brought to notice that the BAIC project was the largest Chinese investment in South Africa to date.
He also said that China has more than $300-trillion dollars of foreign currency reserves and, therefore, has enough funds to invest even more into South Africa. South Africa is a new market for Chinese investments and that they hope the BAIC project will kickstart a deluge of further megaproject investments.
Nyawose further noted that the country’s recent credit rating downgrade by Standard & Poor’s (S&P’s) would affect foreign direct investment (FDI) negatively from countries wanting to invest into South Africa; however, this would most likely not block FDI from China.
He pointed out that China was in the process of setting up its own rating agency which would complement S&P’s, Moody’s and Fitch.
“We want to reassure Chinese investors that South Africa is an attractive destination for investors,” said Nyawose.
South African Embassy’s economic first secretary Seth Mompei, stated that both countries’ association of the Brazil, Russia, India, China and South Africa grouping could play a role in further growing bilateral investment.
He added that South Africa has a mature automotive market that would benefit from investment by Chinese firms.
He added that it would also have a trickle-down effect on other areas of the manufacturing sector.
Nyawose also stated that many South African small, medium-sized and micro enterprises would benefit from the BAIC investment.
“It will also serve to increase the level of skills in the country among our emerging industrialists, which bodes well for the growth of our economy,” he noted.
The R11-billion automotive assembly plant being established at the Coega IDZ is a joint project between BAIC and South Africa.
At full capacity, the plant will have the capacity to produce 100 000 vehicles a year.
The first phase will have the installed capacity to assemble 50 000 units a year.
About two-thirds of production will be exported.
BAIC will assemble the D20 hatchback and sedan range, as well as the X25 sports utility vehicle, in South Africa

Posted on : 23 Nov,2024 | News Source : ABNews

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