Super Group has bought 50.1% of Great Wall Motors (GWM) SA, the South African import and distribution representative of Chinese automotive group GWM.
The value of the deal, effective March 1, has not been disclosed.
GWM SA was previously 96% owned by chairman Tony Pinfold. GWM SA is probably South Africa’s most successful Chinese light-vehicle brand — probably because it is the only one to report its monthly sales figures to the National Association of Automobile Manufacturers of SA (Naamsa).
Having launched in South Africa seven years ago, it claims to have more than 50,000 vehicles on South Africa’s roads. In the first two months of this year, it reported 779 sales to Naamsa. The company also has a parts distribution warehouse with stock of about R160m.
Super Group dealerships CEO Graeme Watson said on Monday the deal had Competition Commission approval but that there were still “a couple” of regulatory issues to be resolved.
This is not Super Group’s first investment in Chinese vehicles.
In 2006, it took a minority stake in China North Vehicle Corporation, also known as Norinco Motors, and helped set up a Powerstar truck assembly plant in Pietermaritzburg.
Most Chinese brands sold in South Africa still rely on low prices to gain market share and although there have been significant improvements, still struggle to shake off a reputation for poor quality.
GWM SA said on Monday it had grown its brand in the affordable vehicles sector, with vehicles that did not “compromise on quality or technological advancement”.
“The investment from Super Group further cements our presence in the South Africa automotive industry. We look forward to harnessing all the synergies and opportunities (in) our allegiance with this reputable group,” Mr Pinfold said.
Super Group CEO Peter Mountford said: “The acquisition of a 50.1% stake in GWM SA definitely fits the profile of a sound and complementary business investment. GWM has proven to be a brand that is going places — both globally and in South Africa.”
The deal is another step in the Chinese motor industry’s gradual incursion into South Africa — a natural base for sales into Africa. Until now, most Chinese firms have tied up with small South African groups with limited experience of vehicle distribution, leading to some brands failing.
Long term, it is expected that more Chinese brands will follow the example of Powerstar and fellow truck maker FAW, and set up assembly operations in South Africa.
FAW is spending an initial R600m on an export-focused truck plant at Coega in the Eastern Cape, but says it may later also build light vehicles.
Source: Business Day