Chery mulls sourcing catalytic converters from SA

Chinese vehicle manufacturer Chery is investigating the possibility of sourcing catalytic converters from South Africa for its production plants in China, says Chery International Asia Pacific and South Africa GM Tony Sun.

This not only provides opportunities in terms of local manufacture, but will also lower the costs of importing Chery vehicles into South Africa.

Chery South Africa (SA) MD Brett Soso says import duties on vehicles from China stands at 28%.

He says there are two ways to drive down these duties, with the first being local assembly, and the second manufacturing components in South Africa for the Chery supply chain.

Local assembly is not currently an option, he notes, as sales volumes are still too low.

Chery has sold 3 571 vehicles in South Africa since May 2008, with Soso optimistic that this will grow as the economy recuperates.

"We are looking at what components we can make here in South Africa, exporting them to offset the import duties on the vehicles we bring into the country."

Government's current support programme, the Motor Industry Development Programme, due to come to an end in 2012, allows for such an offset.

Soso says Chery SA is looking into catalytic converter as well as seat manufacture.

"We are doing a feasibility study as Chery SA, and should have an answer by mid-2010."

Soso says Port Elizabeth currently looks like the logical setting for any such component manufacture.

Chery expects to sell 490 000 vehicles worldwide this year, targeting the 800 000 mark for 2010.

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