Chery, Foton to launch four new models in South Africa this year

Independent Online - The assault on the South African new vehicle market by Chinese brands will move up a gear when Chery and Foton launch a total of four new models into the domestic market, including a people carrier specifically targeting the taxi market, this year.

Brett Soso, the managing director of Amalgamated Automobile Distributors (AAD), a joint venture between the listed Imperial and Bidvest groups that distributes both brands, said last week that Chery would introduce three new models to the local market in the next 12 months and Foton one new model. Soso said Chery was eager to get new products into the local market because its last new model was launched in October 2009.

Chery would be introducing the J3, a C-segment entrant offered as a hatchback and a sedan; the J2, a B-segment competitor that would also be sold as a hatch and sedan; and the P10 15-seater “people mover”, which would comply with taxi recapitalisation regulations but also be targeted at schools and the hospitality industry.

The new Foton P201 double-cab pick-up would compete in the premium segment of this market.

Soso said Chery sales into the local market rose 70 percent last year compared with the previous year, but admitted 2009 was tough and that it had experienced at least a 50 percent decline in sales because of the mass exodus of other imported brands from the local market. This was related to the financial crisis and a slump in new vehicle sales.

Soso said the exodus of these brands made banks nervous about providing finance for smaller imported brands.

However, Soso expected sales to increase by 10 percent to 15 percent this year. Soso said it still had about 30 Chery dealers and would add about five to this network while it planned to grow the 20-strong Foton dealer network by about four dealerships.

The focus was on consolidating the existing dealership base and having stronger, more strategically located dealerships to ensure good after-sales service.

Taxi vehicle sales had declined by 39 percent between 2008 and last year, but the estimated decline in sales was more than 50 percent if all brands that did not report sales were included.

He attributed this to the funds for the scrapping allowance in the taxi recapitalisation programme drying up and more stringent lending criteria introduced by finance houses.

But Soso said the Chery P10 would have a price advantage and AAD was involved in a process with the SA National Taxi Council (Santaco) and its commercial arm, TaxiChoice, to get it endorsed by the industry.

Soso said this involved AAD giving Santaco and TaxiChoice one of these vehicles with a special permit to test it in real time and make any recommendations before it was launched.

The Foton View has been available as a minibus or panel van.

Biren Zhou, the president of Chery International and vice-president of the Chery Automobile Company, said two years ago Chery could establish a plant on the African continent and South Africa was probably the best location, but this depended on sales volumes into Africa.

Soso said this had not been ruled out and both Chery and Foton had an interest in establishing assembly facilities on the continent, but it was dependent on a feasibility study and was “five years away, if not longer”.

Chery, the passenger car market leader in China, grew sales by 36 percent last year to 682 000 units. Foton is the commercial vehicle market leader. It increased its sales by 13 percent to 681 000 units.

Geely South Africa, the original importer and distributor of the Chinese vehicle brand in South Africa, went into liquidation in 2009, as did GoNow Auto South Africa, which had subsequently appointed a new southern African distributor for its vehicles, while the McCarthy group stopped the import and distribution of Chinese commercial vehicle brand Meiya. Several other imported brands experienced financial difficulties, including China Auto Manufacturers, the local distributor of Inyathi minibus taxis.