The Strategist

China to plough $ 819 million into South African car industry

08/19/2016 - 14:54

Chinese state car company will invest 11 billion rand ($ 819 million) in a new plant in South Africa, contributing to further development of one of the fastest growing industries in the continent's largest economy.

Beijing Automotive International Corp. (BAIC) made a deal with the Coega Development Corporation - operator of an industrial development zone in Port Elizabeth on the south coast of South Africa. The investments came from an agreement signed by the President of South Africa Jacob Zuma and Chinese President Xi Jinping in December last year. 

"Volume of these investments demonstrates confidence of China and South Africa’s reliance as an investment destination", - said Rob Davies, Minister of Trade and Industry of South Africa. East Cape is an automotive center, and has a potential for improvement supply chains, creation of job and economic development, he said.

Automotive industry in South Africa is growing at the slowest pace since the recession in 2009. Now, South Africa has to attract companies, including Toyota Motor Corp., Ford Motor Co. and BMW AG, to invest in the automotive business. The country’s automotive industry could potentially increase production by almost 50% to more than 900 ths. cars a year by 2020, claimed the South African automakers in May.