Chery Eyes Strategic Plant-Sharing Partnerships in South Africa
Chery Eyes Strategic Plant-Sharing Partnerships in South Africa to Accelerate Local Production and Navigate Global Trade Shifts
In a bold move signaling China’s deepening automotive footprint across Africa, Chery Automobile is actively exploring plant-sharing arrangements with established automakers in South Africa, a strategy that could reshape the region’s manufacturing landscape while shielding the company from rising trade barriers.
Tony Lui, CEO of Chery South Africa, revealed during an automotive conference that the company is in advanced talks with multiple original equipment manufacturers (OEMs) to potentially co-utilize existing production facilities. This approach offers a faster, more agile alternative to constructing a greenfield site from scratch, an option Lui acknowledged would take “a little bit longer” amid tightening global timelines and escalating import tariff risks.
Rather than merely exporting vehicles, Chery is prioritizing localization. The company plans to launch its compact Tiggo 4 SUV for the South African market first, with ambitions to expand distribution across the broader African continent. To meet stringent local content requirements and foster long-term sustainability, Chery intends to bring key Chinese suppliers into the South African ecosystem—embedding its supply chain within the region’s industrial fabric.
A particularly compelling model under consideration is the complete knocked-down (CKD) assembly format, where vehicles are built from imported kits at a local facility. This method not only reduces exposure to import duties but also aligns with South Africa’s national automotive strategy, which aims to double annual vehicle output to 1.4 million units by 2035—up from the current average of 600,000—while significantly boosting domestic value addition.
Notably, speculation is swirling around whether legacy players like Mercedes-Benz might open their East London plant to third-party production. While outgoing CEO Andreas Brand declined to confirm any specific deals, he pointedly noted that the facility had historically produced multiple brands, adding, “There is technically no reason not to tap into that again.” This historical precedent opens a tantalizing possibility: a future where South African factories become shared hubs for both legacy and emerging automakers.
Chery’s strategic pivot reflects a broader trend among Chinese carmakers, who are increasingly investing in overseas manufacturing to preempt protectionist policies in key markets like Europe and North America. But in South Africa, the stakes are higher—it’s not just about market access, but about becoming a genuine partner in the nation’s industrial transformation.
As Lui emphasized, “We are interested in the long-term investment in South Africa.” That commitment, coupled with similar moves by global players like Stellantis, could be the catalyst South Africa needs to turn its ambitious automotive vision into reality—transforming the country from a regional assembly point into a true manufacturing powerhouse for the African continent.
