Taking Nissan's South Africa Piece, Then Viewing Chery's Global Chessboard

Last year, China's passenger vehicle exports surpassed Japan to take the global top spot; in the first half of this year, exports increased by another 65.3%, with the full year expected to break the 10 million vehicle milestone. This number is striking, but behind the glamour, an awkward reality is emerging: cars are selling in increasing volumes, but the walls of regulations are getting higher and higher.

The EU imposed countervailing duties of up to 35.3% on pure electric vehicles made in China, pushing the combined tax rate above 45%; Brazil raised import tariffs for electric vehicles uniformly to 35% starting from July 1st; Thailand implemented a 'production wager' mechanism, requiring the local production of 2 vehicles for every 1 imported; South Africa is also considering raising the import tariff for complete vehicles from China and India to 50%.

From Europe to Latin America, from Southeast Asia to Africa, Chinese automobiles are facing encirclement on all sides. The light-asset model of producing domestically and selling overseas has hit its ceiling.

On July 3, 2026, Chery made a move in Pretoria, South Africa, formally taking over the Rosslyn Plant, which Nissan had operated for nearly 60 years. This appears to be an ordinary transaction for Nissan to cut losses and Chery to expand production, but viewed under the proposition of 'how Chinese automakers can truly take root overseas', its weight is quite different.

Nissan Sheds Burden, Chery Takes Capacity

The sale of the Rosslyn Plant is part of Nissan's global restructuring plan 'Re:Nissan'. In the 2024 and 2025 fiscal years combined, Nissan reported a total loss exceeding 1.2 trillion yen. According to the restructuring plan, Nissan will close 7 plants globally and lay off about 20,000 people before the 2027 fiscal year, reducing global production bases from 17 to 10.

This factory previously produced models such as the Navara pickup and NP200, with products covering more than 40 African nations. However, capacity utilization rates have continued to decline in recent years. After the NP200 stopped production in March 2024, Navara became the factory's only in-production model, yet monthly sales were only a few hundred units. In May 2025, Nissan announced that local production of Navara would also cease. For Nissan, this factory has transformed from an asset into a burden.

For Chery, taking over an existing factory is more efficient than building from scratch. Chery entered the South African market in 2021, showing a steep growth curve. At this node of rapid expansion, local capacity means avoiding exchange rate and tariff risks, and also provides a hardware foundation for the next step of expanding market share.

More importantly, this acquisition is a piece in Chery's 'systematic overseas expansion' chess game. Since the beginning of this year, Chery has not just been selling cars but has deeply planted the roots of an entire industrial chain, including R&D, manufacturing, operations, and standards, into overseas markets.

In Europe, the European Operation Center and Research Institute in Barcelona, Spain, have been commissioned, and the joint venture factory with EBRO has also started production and operations; in Southeast Asia, a new factory in Vietnam worth 800 million USD is under promotion. The South African Rosslyn Plant is positioned as a comprehensive automotive hub radiating to Southern Africa.

The layout of these three locations supports each other, and a global manufacturing network is taking shape.

The Real Challenges of the South Africa Move

With the factory handover complete, the real test may have just begun.

Chery committed to retaining all 692 employees, planning to start production in mid-2027, with a future single-shift capacity of 50,000 units, and striving to achieve a 40% localization rate before 2028. This 40% is the core challenge.

Currently, South Africa imposes import tariffs of about 25% on complete vehicles, with the government considering raising the tax rate to the WTO-allowed limit of 50%. Once implemented, imported models dominated by Chinese and Indian brands will face direct cost pressures.

This is actually a positive for Chery. However, there are concerns; if the localization progress cannot keep up, the cost of importing parts will rapidly increase the overall vehicle manufacturing cost.

More realistically, the South African domestic market size is limited, with new car sales of about 550,000 per year, far insufficient to absorb large-scale production capacity. If the capacity of the Rosslyn Plant is to be fully utilized, Chery must treat South Africa as an export base, selling cars to Southern Africa and even farther markets. However, the automotive market size in most African countries is extremely small, infrastructure is weak, and export channels are not smooth.

Meanwhile, the foundation of the South African local parts industry is not optimistic. Data from the Motor Industry Association of South Africa shows that in 2025, only 33% of vehicles were manufactured locally in South Africa, a significant drop from the previous level of over 50%.

The South African local parts industry has long relied on orders from multinational automakers. As brands such as General Motors, Ford, and Nissan successively withdrew or reduced local production, the parts supplier system has already begun to shrink.

For Chery to achieve a 40% localization rate within three years, it means building or restoring an entire supply chain from scratch, introducing Chinese parts suppliers, and completing localization certification and production preparation. The schedule is quite tight.

Conclusion

Once this chess piece, the Rosslyn Plant, is placed, the situation on the chessboard begins to change. This is a landmark node for Chinese automotive export shifting from 'trade-type' to 'rooted-type'.

Against the background of tariff barriers encircling on all sides, the light-asset model relying on complete vehicle exports is unsustainable. Chery has chosen a more sustainable path, deeply planting an entire industrial root system including R&D, manufacturing, supply chain, and standards into overseas markets.

This path is not smooth. The 40% localization rate, the fragile parts system, and limited market capacity, each is a threshold that needs to be crossed. But Chery is not starting from zero.

The operational experience accumulated over more than 20 years of struggling overseas, as well as the global competitiveness of the Chinese automotive supply chain providing cost and technical support, its layout in Spain, Vietnam, and South Africa is forming a network effect.

Perhaps the most fitting conclusion is the words from Chery itself on social media: 'A new era is coming. From this moment on, Chery Automobile will proudly serve South Africa, manufactured in South Africa.'

This statement speaks not only of the fate of a factory but also of a fundamental transformation that Chinese automotive export is undergoing: from selling a car to rooting in a place. This is true globalization.