Chinese automakers are expanding into Africa, using South Africa as a launchpad, as trade restrictions in the United States and Europe push them to find new markets.
Companies such as BYD, Chery Auto, and Great Wall Motor are offering low-cost electric and hybrid vehicles to attract customers in a region with limited EV infrastructure and low incomes. Nearly half of the 14 Chinese car brands now active in South Africa entered the market last year, and more are expected to follow.
Chery South Africa CEO Tony Liu said South Africa is seen as a key entry point to the continent. Chery, the second-largest Chinese automaker in South Africa, is considering setting up a local factory or partnering for assembly to benefit from government incentives.
Omoda & Jaecoo, Chery’s premium brand, is also studying local production.
GWM, the top-selling Chinese automaker in South Africa, is reviewing the idea of local assembly through a semi-knockdown plant to reduce costs. COO Conrad Groenewald said the company would revisit feasibility studies within a year as economies of scale improve.
Chinese EV makers have faced challenges in wealthy markets due to slower-than-expected EV sales and high tariffs, including 100% duties in the U.S. and rising EU import barriers. These pressures have made Africa, though still a small market, more attractive.
South Africa produced just under 600,000 vehicles in 2023, but the government aims to grow this to 1.5 million by 2035. Chery is launching eight hybrid models in South Africa, with plans to add EVs from its iCar and Lepas brands.
BYD entered South Africa in 2023 and recently expanded its lineup to include plug-in hybrid pickups and crossovers.
Chinese companies are focusing on hybrids, which executives say are more suited to current conditions. New energy vehicles, including EVs and hybrids, reached a 3% share of new car sales in South Africa in 2024, more than double the previous year.
Executives believe that as market share grows, demand will increase quickly. Still, Chinese automakers must overcome concerns about quality, spare parts, and resale value. They aim to stay competitive by offering advanced technology and vehicles priced below 400,000 rand, or about $22,500.
Omoda & Jaecoo plans to triple sales in 18 months and enter markets such as Zambia and Tanzania. BYD is expanding into East, Southern, and West Africa, including a first entry into Tanzania.
Steve Chang of BYD South Africa said he sees long-term potential for Africa to skip internal combustion and move directly to renewable energy vehicles.
