Moving up a gear

Zhang Zhiliang, head of Foton Automotive Engineering Research Institute, says the company had to make adjustments to ensure that its vehicles do not suffer from problems of overheating of engines and tires in Africa.

Other changes, including a larger venting area for the engine, high-endurance rubber spare parts and high-powered air conditioners, are all special tweaks that the company incorporates in its African models, Zhang says.

Unlike Foton, which focuses on building customized vehicles for the African market, BYD Auto Co is banking on efficient logistics to drive sales in Africa.

Isbrand Ho, general manager of BYD auto export trade division, says the company will soon set up one or two logistics centers in Africa, to facilitate smoother delivery of passenger cars, electric vehicles and spare parts.

"Having such a set-up on the ground in Africa ensures that our after-sales team can quickly procure the required spare parts in the event of vehicle breakdowns," Ho says.

The company has been present in Africa for more than seven years now and has assembly units in Syria, Egypt, Iraq and Russia.

Thanks to a strong local partner in Egypt, BYD recently secured a large order to provide taxis in Cairo. The company is also bidding for government car orders in Egypt. This year, the company expects to deliver 8,000 to 10,000 vehicles in Egypt. Though the limited capacity of its local plant only allows 20 cars to be produced every week, it is pushing its local partner to expand the capacity to 200 units a week by the end of August, say company officials.

The reciprocal arrangements that Egypt enjoys with other African countries, such as Tunisia and Morocco, also helps BYD to sell its vehicles in these markets without attracting additional duties.

"The African market is basically a low-price and low-demand market," Ho says.

"We sell them cars with fewer features. In China, for instance, most cars have power windows, but cars in Africa still have hand-rolled windows. These features are taken out in Africa to reduce the costs."

Currently, BYD only sells its sedan model F3 in Africa. Plans are afoot to introduce sports utility vehicles soon as the company feels that there is enough demand to deal with the tough road conditions in many parts of the continent.

Dong Yang, vice-chairman of the China Association of Automobile Manufacturers, says that though Chinese companies don't have recognizable brand names, customers in most of the destination markets are becoming more price-sensitive in recent years due to the financial crisis. All these aspects offer rosy prospects for Chinese automakers, he says.

In 2007, when BYD started exporting vehicles, there was hardly any difference between its domestic and export models. "The only difference in those days was the country name on the brochure. But now we know that this is just not possible and that we have to design vehicles specifically for individual markets," Ho says.

Changing customer preferences are another reason why companies have chosen to tailor Africa-specific vehicles. While Russian customers love big, bulky SUVs and require seats that can withstand extreme cold, vehicles for the Middle Eeast market tend to be models with big engines, leather seats and sharp finish.

"For the emerging markets, we focus more on the value-for-money models, while in the mature markets, we focus on environmental friendly models," Ho says.

BYD electric vehicles are already sold in mature markets such as UK, Israel and Poland. Ho hopes that electric vehicle exports would increase substantially in the next five years, with Africa having a major say in overall revenues.