Chinese investment allows Mozambique to become a car manufacturer

March 4, 2013 — Leave a comment
Chinese cars wait to be exported at a port in Dalian, Liaoning province. (China Daily/Reuters)

Chinese cars wait to be exported at a port in Dalian, Liaoning province. (China Daily/Reuters)

With the new APDP programme ably supporting the local South African vehicle manufacturing industry, the possibility of Chinese investment in Mozambique should have little impact on the local vehicle cartel. However, the possibility of competition for the local industry is just what is needed to create competitiveness in the region.

Mozambique is expected to become a car manufacturing and exporting country this year following an investment by China Tong Jian Investment, which is also attracting other companies in the sector to Mozambique. Danilo Nalá, the director general of the Office for Economic Areas with Accelerated Development (Gazeda), told Mozambican newspaper Correio da Manhã that investors from Saudi Arabia and Bahrain were interested in investing in tyre manufacturing in the city of Matola, on the outskirts of Maputo.

The tyre factory, which will be part of the project for the car assembly plant in Matola funded by Chinese investors, as of April 2013, may either involve acquisition of the technically bankrupt company Mabor or setting up a new unit from scratch. According to the newspaper, “there is a lot of interest from Asia in re-launching the tyre industry,” in Mozambique. (Comment: This could be an area of contention for the local market though).

Construction of the China Tong Jian Investment factory, costing an estimated US$200 million, is the result of an agreement the Mozambican government signed with the company in 2010. The agreement outlines that, at an initial stage, the facility should produce around 10,000 vehicles per year, 30 percent of which for the Mozambican market and the remainder for export.

Production is then outlined to be increased to 30,000 units per year and, later, to 100,000 units.

The factory, which is located in the Machava area of Matola, in the former workshops of Mozambican state port and rail manager Portos e Caminhos de Ferro de Moçambique, will produce buses and light passenger vehicles of the Matchedje brand. Matchedje is the name of the village in the Sanga district of Niassa province, which hosted the 2nd Congress of the Mozambique Liberation Front (Frelimo), which is the political party currently in power in the country.

China Tong Jian Investment is based in Shanghai and its largest shareholder is New Zealand’s Morgan Foundation and its business focuses on promoting China-Africa relations. Source: Shippingnews.co.zw

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