Going south

Chinese EV giant Chery has begun an overhaul of a factory it has acquired from Nissan Motor in Rosslyn, South Africa, with the aim of starting production of 50,000 vehicles per year from mid-2027. This comes as the South African government is reportedly considering increasing tariffs on Chinese-made vehicles from 25% to 50% in a bid to protect its own auto manufacturing industry.

If this tariff increase goes ahead, South Africa may be seen to be taking the lead in terms of restricting Chinese vehicles entering their markets. The only other countries in the Global South to put significant tariffs on Chinese cars are Brazil—which is gradually increasing its tariffs on EVs until it reaches 35%–and Turkey, which has a 40% tariff on Chinese autos. Both of these countries have cited the tariffs as an effort to encourage manufacturers to open up local operations. Obviously South Africa is motivated by the same concern, and Chery has indicated it is willing to support the local economy, saying it plans to retain all 692 existing employees and expects to create a further 3,000 jobs as production starts. 

Chinese automakers are increasingly looking to localize production across the Global South. This is most prominent in Southeast Asia, where Thailand has become a major hub for companies such as BYD, Great Wall, SAIC, Changan and GAC. In Latin America, Brazil is similarly taking the lead, with BYD, Chery and Great Wall all operating major plants. For countries in the Global South—as elsewhere—ensuring manufacturing is moved onshore has obvious benefits to the local economy, but there is one issue that is not addressed, and that it IoT—ie the control of data. If there is no requirement for the computational elements of the vehicles to be locally made or at least controlled, then a big resource is still being handed away to an outside entity.