Business / Auto China

African success revs for auto firm

By Li Lianxing (China Daily) Updated: 2014-04-15 07:15

The first trucks to be assembled at the new plant are expected to roll off the line this year.

"It will, however, take us three years to achieve the annual production goal of 5,000 vehicles," Hao said.

Hao said the Coega factory will be FAW's main maintenance hub in South Africa, as well as being the training and manufacturing center.

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"There are limits to the technicians and employees that we can send to Africa; it is important for us to invest more in training and education programs for local talent," Hao said. "We are hopeful that the FAW training centers will not only serve our needs but become important public education centers and resources for those interested in relevant technologies and skills."

FAW trucks first came to Africa in the 1970s as part of the Tazara railway project that built a line between Tanzania and Zambia. It was one of the first big overseas projects by Chinese companies in Africa.

Buoyed by the encouraging response to its trucks, FAW established a Tanzanian office in the 1990s.

"Our heavy trucks were initially exported only to Tanzania. However, it soon caught the fancy of an Austrian car seller who was running the Mercedes-Benz renewal business in South Africa," Hao said. "The dealer convincancy of an Austrian car seller who was running the Mercedes-Benz renewal business in South Africa," Hao said. "The dealer convinced us that the trucks would be received favorably in other African markets, too. We decided to take the plunge and initially entered the African market through dealers. In 1999, we decided that it was better to set up a local unit."

That decision, Hao said, was daunting, as the company did not have any ground experience: "Our earlier engagements were trade-related. The new decision meant that we had to look into other aspects like research and development, branding and after-sales service."

Hao said the real challenge was to establish the brand, as South African consumers were reluctant to accept Chinese or other Asian products in a market that had long been dominated by Western goods.

"Luckily for us, we could bank on the support from several old customers. Ten years ago, selling 100 trucks a year would have seemed overambitious, but now we are confident that we can sell at least 800 trucks every year," Hao said.