China Floods South Africa with Cheap Electric Vehicles

Low-cost Chinese electric vehicles (EVs) have reportedly made major inroads into South Africa’s market, with industry analysts pointing to years of double-digit sales growth.

Once shunned by consumers as undesirable and unreliable, Chinese cars have finally become popular enough for South Africa’s ubiquitous car thieves to begin stealing them.

Voice of America News (VOA) noted on Thursday that gas-powered Chinese cars from brands like Chery, BAIC, and Haval are growing more popular in South Africa as well. Almost everyone VOA interviewed agreed that low price points were the big attraction.

Many of the big American, Japanese, and German car brands have factories in South Africa, while China’s BAIC has been struggling to get one off the ground for over six years. Mikel Mabasa, CEO of South Africa’s Naamsa auto business council, tactfully explained that BAIC’s factory is “still in the setting-up phase” after pandemic delays and labor disputes.

Local manufacturing helped Ford and Toyota build dominant positions in the South African auto market, but Chinese brands are dramatically undercutting them on price, even with the extra cost of importing their vehicles. The Toyota Hilux (pickup truck) and Ford Ranger remain the top models in South Africa, with 34,000 and 24,000 units sold over the past year respectively, but Chinese brand Chery managed to sell 11,000 of its Tiggo 4 Pro sport utility vehicles during the same period.

South African President Cyril Ramaphosa dropped in to visit the Guangdong headquarters of electric vehicle giant BYD during a state visit to China in early September and encouraged Chinese EV manufacturers to open factories in South Africa.

EV sales have been slow in South Africa, but Ramaphosa said his government has “introduced policies to promote the development of the electric vehicle industry.” VOA speculated China might take him up on the offer because heavy tariffs are preventing it from invading the American and European markets.

Business Tech reported in September that as the South African economy languishes and consumer spending declines, China’s cheap cars are grabbing a bigger slice of a new vehicle market that shrank by 5.6 percent last year.

Twenty-seven models of Chinese car are now available for purchase in South Africa, with starting prices as low as $16,000 in U.S. currency. Data from South African banks indicates Chinese brands grew from six percent to 7.4 percent of vehicle financing deals, even as overall auto sales declined.