The Chinese brand that wants to build more cars in South Africa

BAIC, short for Beijing Automotive Industry Corp., is a Chinese state-owned automobile manufacturer, and joined forces with the Industrial Development Corporation (IDC) to create BAIC South Africa in 2016.

As per the agreement, BAIC holds a 65% stake in the local division while the IDC owns the remaining 35%.

A factory was then opened in 2018, and Chinese President Xi Jinping and South Africa’s Cyril Ramaphosa were in attendance.

Found at the Coega Special Economic Zone in Gqeberha, the project was China’s most significant investment outside Europe.

The R11 billion plant had a vehicle assembly line, press shop, paint shop, body shop, administrative offices, and a neighbouring supplier park for component manufacturers to support production.

Despite the growing popularity of Chinese automakers in South Africa, specifically GWM and Chery, the BAIC factory has struggled with production since its launch.

In 2024, City Press said that the plant had only assembled 300 units in six years. All other targets were also missed. For context, the Ford Silverton plant in Pretoria produces over 700 bakkies daily.

BAIC aimed to produce between 40,000 and 50,000 vehicles a year for local and export markets, which would have created 3,000 jobs by the end of 2022.

The company attributed the poor performance to labour disputes, the Covid-19 pandemic, and supplier troubles.

The company also noted that the South African market is too small to support the full operation of the plant, with the company needing to grow its brand and market share.

BAIC South Africa also did not benefit from the government’s incentives of the Automotive Production and Development Programme (APDP), which allows rebates and subsidies.

Production at the factory started with the D20 and then the X25, but both models were discontinued.

The X55 was then introduced and proved popular with the local market, scooping car of the year awards. 

Positive signs

Recent government meetings have pointed to increased investment from BAIC to expand the plant’s services.

Chinese ambassador to South Africa Wu Peng visited BAIC’s headquarters in Beijing in April, where its chairman told him that BAIC plans to expand its plant in South Africa.

Peng said that the expansion would come despite the impact of unreasonable US tariffs.

These comments came amidst heightened tensions over the country’s extremely high tariffs, but tariffs have since lowered following negotiations between the countries.

South African Minister in the Presidency Responsible for Planning, Monitoring and Evaluation, Maropene Ramokgopa, visited the BAIC factory last week.

As the District Development Model Champion in Nelson Mandela Bay Metropolitan, Ramokopga led a delegation to meet with BAIC’s leadership,

The meeting focused on deepening collaboration in implementing reforms to accelerate development.

The increased production could further cement BAIC and the presence of Chinese manufacturers in South Africa.

Several brands have seen a sharp drop in sales over the last decade, with many consumers facing increased cost pressures amidst heightened interest rates and slow real wage growth.

Chinese brands are excelling in this department by providing high-quality specifications, advanced technology and competitive pricing, which makes them an attractive alternative to normal luxury brands.

Another indicator of the Chinese car brand’s success in South Africa is its growing presence in vehicle financing deals.

Standard Bank’s vehicle finance division revealed that its share of Chinese brands in new financing deals increased from 6% in 2022 to 7.4%.

BAIC is still behind GWM, Haval, and Chery in terms of the most populated brands financed by Standard Bank.