BAIC's Gqeberha plant operating at near standstill

Chinese brand Beijing Auto Industrial Corporation (BAIC) recently held a media visit at its Gqeberha vehicle assembly plant to show progress at the contentious facility.

Since building of the plant commenced in 2016, every stated deadline has been missed including reaching a 50,000 annual production capacity by 2022. 

The brand founded in 1958 is one of several Chinese brands sold in South Africa, but unlike its peers, it has vehicle assembly facilities in Gqeberha. It markets the BAIC B40 SUV and Beijing X55 crossover, the latter being the car it assembles locally.   

It was a ground-breaking development in 2016 when the Industrial Development Corporation (IDC) — the institution that funds industrialisation projects in South Africa — entered into what was hailed as one of the largest Sino-SA projects. The IDC owns a 35% stake and BAIC holds a 65% share in the R11bn project.

The government entered into the agreement hoping it would create jobs. At the start of the project it was estimated that 10,000 jobs would be created through the  automotive value chain.

Initial plans for the 89,000m² plant in the Coega Special Economic Zone included an assembly line, press shop, paint shop, offices, a body shop and a supplier park next to the factory housing small and medium-sized local component manufacturers to support full-scale production.

As part of the festivities to celebrate the birthday of former president Nelson Mandela, the company opened the plant’s doors to media. 

The plant kicked off production with the now discontinued D20 and X25 models. Its focus now is on the semi-knocked down assembly of the newer Beijing X55 crossover model. The plant is designed to eventually shift into a completely knocked down assembly, differentiating BAIC from imported Chinese brands such as Haval and Chery.

Production has been marred by delays which BAIC attributes to the Covid-19 pandemic, but the project has also been affected by labour disputes. BAIC also blames a lack of brand awareness for slow sales of its vehicles, which has failed to create demand for its production target of 50,000 cars a year, most of which was aimed at export markets.  

BAIC SA said about 3,000 units of the X55 had rolled out of the factory’s doors.

According to motor industry umbrella body Naamsa, the company sold 119 cars locally in June. The Beijing X55 accounted for 114 of these with the remainder the B40 Plus, which indicates a crisis for the multibillion-rand manufacturing project.

The factory walkabout revealed a neat, well-invested but quiet facility with a skeleton staff. We did not see many of the 106 people reported to be employed at the facility.

The company said it expected to be in full swing with more staff once demand for its cars ramps up. 

Asked about the delays at BAIC, the IDC said it was in touch with management at the factory and was aware of activities. It understood BAIC management’s view that production output should be linked to market demand. 

In a move that could help the factory get into gear, BAIC subsidiary Foton plans to assemble commercial vehicles at the facility from 2026.