Business / Auto Global

Chinese wheels really start rolling in East Africa

By Wang Chao (China Daily) Updated: 2014-07-15 06:57

Foton also plans to introduce a new model to the Kenyan market, a multipurpose vehicle designed for small business owners.

Beijing plans to mark the company's expansion in Nairobi by donating two Foton Tunland pickups to the Masai Mara National Reserve, which will be used to support its wild animal protection initiatives.

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Africa is not completely virgin territory for Foton. It has been exporting to the continent since 2005. Last year, the company shipped more than 40,000 vehicles overseas. Although the number sent to Africa was not specified, the company said the region showed strong growth momentum.

It opened its Kenyan sales operation in March 2012, and the Tunland is already popular in the country.

Huo said that over the past two years, the Chinese domestic commercial vehicle market has struggled to recover after the country's economic slowdown, and the parent company's overseas market has become a lifeline for many automakers, including Foton. Its latest figures showed export volumes grew 10 to 20 percent over the past two years.

Huo said Foton's new Kenyan plant will play an important role in expanding into key East African economies. "We will use Nairobi as our manufacturing base and gradually radiate to the whole East Africa region. This also means Foton is transforming itself from being purely a trade company into a local vehicle producer."

The vehicles will be assembled and customized to suit local requirements.

"In China, the commercial vehicle market is already saturated after 30 years of development, so there is little room for sales improvement. To gain a bigger market, we have to look beyond our borders," Huo said.

Foton has three main parts to its export business: fully assembled vehicles; local assembly of imported parts and local production, which means the company buys many components locally and avoids high import tariffs.