September 26, 2017 / 10:53 AM / 3 years ago

BAIC expects first cars from South African plant by early 2018

PORT ELIZABETH, South Africa (Reuters) - Chinese car-maker BAIC said on Tuesday it expected the first vehicles to roll off its new 11 billion rand ($826 million) South African assembly plant early next year, with most of the vehicles destined for export.

A member of staff cleans Beijing Automotive Group (BAIC) Senova X55 SUV at its booth during the Auto China 2016 auto show in Beijing, China April 26, 2016. REUTERS/Kim Kyung-Hoon

The factory, near car export hub of Port Elizabeth, will be the first new car plant in South Africa in four decades and is expected to build 50,000 vehicles a year by 2022, half its estimated peak output, company officials said.

“We expect the first cars from the plant in the second quarter of next year,” Sun Tongli, BAIC’s senior manager, told reporters.

The Chinese have a 65 percent stake in the joint venture, with South Africa’s state-owned Industrial Development Corporation owning the rest.

Construction on the main assembly site is several months behind schedule, mainly due to contractor and labour disputes.

The assembly plant includes a paint and body shop but all parts will be imported.

The cars are mainly expected to be exported to neighbouring countries.

“The market is tough here in South Africa but they do foresee the regional SADC (Southern African Development Community) market, including South Africa, will be picking up in due course,” Kingsley Dell-Robertson of the IDC said.

South Africa is the continent’s main car-maker, with Toyota, BMW, Ford and VW among those with assembly plants.

South Africa’s new vehicle sales rose 6.7 percent year-on-year to 49,222 units in August, data from the trade and industry department showed in September.

Reporting by Wendell Roelf. Editing by Jane Merriman

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