Bad news for Chinese brands in South Africa

Financial Mail - The collapse of the Chana vehicle business in SA is bad news for all Chinese brands operating here, says John Jessup, managing consultant to China Africa Motors. He fears Chana's failure will make consumers think twice before buying Chinese vehicles.

Jessup's previous company, Geely SA, abandoned the SA market some years ago. Jessup, a former BMW SA and Nissan SA marketing head, was hired as MD when Geely returned in 2010.

Chana cars and light trucks have been sold here since 2007. The local importer and distributor, Friedshelf 1100, operating as Changan Southern Africa, was granted a provisional winding-up order in the south Gauteng high court on August 10. It is due to be made final on September 4. Friedshelf is owned by an SA company, Rand-Asia Trade Finance. Its officials, and Changan Southern Africa CEO Teresita van Gaalen, were not available for comment this week.

It's not clear what continuing support Chana owners can expect in terms of spare parts and service. About 10000 vehicles have been sold in SA. Sources say Van Gaalen, the former MD of Subaru SA, is trying to organise a deal to help owners.

Chana has been a fringe brand in SA. In China, however, it is a major player, building over 1,8m vehicles in 2011. It is understood to be already looking for a new SA distributor.

Toyota SA president Johan van Zyl says Chana's SA failure underlines the need for foreign brands to ensure their distributors have the necessary financial skills and market know-how.