China’s leading auto manufacturer, First Automobile Works, has begun construction on a US$100-million truck and passenger car plant at the Coega industrial development zone in South Africa’s Eastern Cape province.
Officials from First Automobile Works (FAW) signed a contract with the Coega Development Corporation earlier this week to mark the beginning of construction at the industrial development zone near Port Elizabeth.
“FAW’s decision to build the plant in South Africa is significant, as it will be one of the biggest manufacturing investments by China in the country so far,” Coega Development Corporation spokesperson Ayanda Vilakazi said on Thursday.
“FAW’s arrival in the Eastern Cape adds to the existing list of automobile manufacturers already in the province, including Volkswagen, General Motors and Mercedes-Benz,” Vilakazi added.
500 new jobs in the first phase
Initial construction of the plant will cover 400,000 square metres and cost R200-million.
The plant is expected to produce 5,000 trucks annually, as well as light commercial vehicles and passenger cars. In its first phase, the plant is expected to create 500 permanent jobs for people in the province.
Once completed, the truck assembly facility is expected to create a further 500 to 800 jobs, with more jobs being created when the company starts producing an additional 30,000 passenger vehicles annually.
“We welcome the private sector’s investment of billions of rands that will provide desperately-needed job opportunities, while also helping to address poverty and inequality in the province,” Eastern Cape Premier Noxolo Kiviet said during the sod-turning ceremony on Thursday.
Coega’s added incentives
Kiviet said the South African government’s efforts to develop infrastructure in the province was pivotal in securing FAW’s investment.
Vilakazi said FAW’s decision to invest in the province was prompted by Coega’s location, the proximity of the Port of Ngqura, the logistical solutions available, the availability of skills in the Nelson Mandela Bay Metropolitan area, and support mechanisms offered by Coega.
Since entering the market in 1984, FAW has produced 16-million vehicles and has consistently been a Fortune 500 company.
FAW is China’s leading exporter of vehicles, and has joint venture operations with many of the world’s leading vehicle manufacturers, including Volkswagen, Toyota and Mazda.