As South Africa builds its reputation as a strong manufacturing base on the international market, one of the big industries targeted for growth has been automotive.
The South African Government has – and continues to work hard to attract international investment in training, R&D and manufacturing plants.
Chinese-owned Great Wall Motors (GWM) is a relatively new player in the South African automotive sector, having made its debut in March 2007, with the launch of a number of Single and Double Cabs, delivered with affordability and quality in mind. The company was listed on the Hong Kong Stock Exchange in 2003 and the Shanghai Stock Exchange in 2011. By December 31, 2012, the company reported that its assets had amounted to 42.569 billion yuan.
The brand quickly built up a good reputation and whilst initial sales projections were for sales of between 3,000 and 4,000 units in South Africa in the first years, by February 2009 the company had sold 12,000 units.
At that time, Henri Meistre, the then Managing Director of GWM South Africa, stated: “The biggest hurdle that the company is striving to overcome is other Chinese brands. Until all Chinese brands show their long-term commitment and attain a reputation for reliability, vehicles from China may be tarred with the same brush.”
The brush was of course purely based around perception of quality – a myth GWM has been keen to address , demonstrated by the fact that it is the first Chinese national automotive brand to pass the European Union (EU) E1 mark. This certification carries added kudos as it demonstrates GMW South Africa’s conformity to production standards and reflects quality management procedures that are comparable to EU requirements.
Such reassurances over quality and design have helped to grow the GWM brand in South Africa and the product range has expanded significantly over the subsequent six years, with a variety of quality pick-ups, SUVs and passenger cars all available.
Today the business is run with over 70 dealerships across South Africa, offering customers warranties and including a parts distribution warehouse in Durban which includes over R150 million of stocking parts.
Operations also include a pre-delivery inspection centre in Gauteng, responsible for strict quality control.
GWM itself, has an increasing global presence, having manufactured vehicles for over 35 years and grown to become China’s largest pick-up and SUV manufacturer.
In 2012 the company launched the Steed pick-up, becoming the first Chinese manufacturer to commence volume vehicle sales in the United Kingdom.
The Steed has one-third market share in China, and over 700,000 have been sold across the globe. Great Wall vehicles are now sold in over 100 countries and by 2015, the company says that it anticipates having the capacity to produce 1.5 million vehicles each year.
At present, the company is reported to have 30 holding subsidiaries, more than 54,000 employees and 4 vehicle production bases around the globe and there is anticipation that further factories will be developed to meet the company’s 2015 objectives.
Commenting at Auto Shanghai 2013, GWM’s President Wang Fengying said, “International strategy is indispensible for a successful auto brand keep growing. GWM values its export quality, product quality and operation quality abroad above export scale, pursues gradual enhancement in overseas brand competitiveness and premium capacity and sustainable development of internationalization. GWM seeks to grow steadily rather than rapidly, and values sustainability more.
“In the coming decade, GWM will keep increasing its strength in overseas market development and brand status through systematic and continuous advancement of adaptive product development, market layout, brand building and after-sales service. Hopefully, the overseas distributors will work with GWM to sharpen its brand competitiveness in local markets and accomplish its sustainable high-quality development.”
For South Africa to compete in such a competitive company is a big achievement and testament to the local market. Since 2008, GWM South Africa has won a number of awards at the International GWM Dealer Conference, including: a Market Leader Award, Marketing Management Award and Outstanding After-sales Service Manager Award.
In April 2013, as a further commitment to South Africa, the company announced that it had opened its new PDI (Pre-delivery Inspection) Centre in Gauteng, with the express purpose of supporting its network.
The centre covers a floor space of 1,500 square metres and is home to 16 technicians and support staff. The site is reported to have a capacity in excess of 1,000 vehicles each month, including GWM vehicles and JinBei Haise Taxis.
In line with the GWM South Africa’s approach to quality, the centre has been fitted with multiple lifts and the latest equipment available ensuring that all vehicles said to be inspected and maintained at the highest possible standard.
In June the company announced 28.3 per cent year-on-year sales volume growth, ranking it amongst the top 8 Chinese manufacturers, with operational revenue of R69.29 billion and total profit of R10.98 billion (which amounted to 65.62 per cent profit growth year-on-year).
“Towards the end of 2012, GWM’s assets totalled R68.34 billion. With 2013 firmly under way, GWM continues to enjoy the recognition of the international capital market with operational revenue of R20.48 billion – indicating growth of 46.09 per cent. The sale of 249,400 units in the 4 four months has also led to a 38 per cent growth, making GWM the seventh biggest manufacturer (by sales volume) in China,” it said in a statement.
“To achieve continued growth in a competitive market, a business needs a sound development strategy, effective operational mechanisms, excellent enterprise culture, continuous investment and technical innovation. An outstanding example of an independent Chinese brand, Great Wall Motors has achieved one milestone after the other. GWM plans to continue closing the gap between Japanese and South Korean brands by building an internationally renowned auto brand with global influence.
“Due to GWM’s streamlined operational procedures, cost management, lean production and strict quality management, it is able to maintain a high profit level when the industry enters periods of micro-growth. Dubbed the ‘Toyota of China’, Great Wall Motors has learned valuable lessons from the way Toyota management operates. For GWM, improving its core competencies, however, remains top priority.
“In South Africa, GWM is mirroring Great Wall’s philosophy of growth through ongoing developments such as a new PDI centre in Kempton Park, Gauteng. This centre has been established to support the GWM dealer network, save GWM dealers valuable time and meet customers’ needs more effectively, and provides further proof that GWM South Africa is perfectly aligned to GWM’s global strategy,” the statement concluded.