Construction on massive vehicle plant to begin soon

Officials from China's leading auto manufacturer, First Automobile Works' (FAW), signed a contract with the Coega Industrial Development Zone (IDZ) earlier this week to mark the beginning of construction on the company's $100 million truck and passenger car plant to be built at the IDZ.

"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. 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," said Coega Development Corporation (CDC) spokesperson, Ayanda Vilakazi.

The plant's initial construction is set to cost R200 million and will be built on 400 000 square meters of land in the IDZ's Zone 2.

It 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," said Eastern Cape Premier Noxolo Kiviet, during the sod-turning ceremony on Tuesday.

She said national 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 also 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.