Fighting on Foreign Soil

Facing overcapacity at home, Chinese automakers are hunting for market share in India's key export strongholds

- Rakshit Kumar

It's 2am in Cape Town and Neel Hariram is preparing for a virtual meeting with colleagues in China.

The call will review the sales performance of Chery, China's biggest vehicle exporter, in South Africa and one of the world's most competitive auto markets. As director of strategic planning for Chery South Africa, Hariram knows every number matters.

Since entering South Africa in 2021, Chery has climbed the charts with astonishing speed. Within a year, it broke into the top 10, selling more than 1,200 units in July 2022.

“The reason Chery grew so fast is that we have worked hard for it,” says Hariram. That drive is paying off. Chery now sells over 2,000 units every month and together with its sister brands Jetour, Omoda and Jaecoo, exceeds 4,000 units, making it the fourth-largest automaker in South Africa, ahead of Hyundai and Mahindra & Mahindra.

The rapid rise has set off alarms among established players like Toyota, Suzuki and Hyundai, many of which export heavily from India. Their long-held dominance in export markets is now under direct threat as Chinese brands surge ahead.

“All players in the market are our competitors. Their [Indian vehicles] price points and product ranges cover the majority of various segments. [But] Chinese products are becoming more aligned with global standards. Indian products still feel made for local consumption,” says Tony Liu, chief executive of Chery Group South Africa.

Under Pressure

Since the Galwan clash in 2020, the Indian government has kept a tight lid on Chinese investments, blocking automakers from expanding in one of the world's fastest-growing car markets. But that has not completely shielded India-made vehicles from Chinese competition.