Made in China, sold in Mzansi: STRAT to the point | EEMEA

研报英文原文证据摘录

Made in China, sold in Mzansi: STRAT to the point | EEMEA

IdeaMCross-sector company level impact:

• South African automotive manufacturers have historically comprised large

Japanese, European and American OEMs - Toyota in Durban; VW, Mercedes

and Isuzu in the Eastern Cape; BMW, Ford and Nissan in Pretoria. However, in

July 2026 Chinese manufacturer, Chery, officially took over Nissan's plant in

Rosslyn Pretoria. This appears to be an important step in securing the local

manufacturing base against this structural shift.

• A number of South African companies supply into these manufacturing

plants – here the commentary appears mixed. While, Metair (not covered)

has stated that the industry is at a cross roads, warning on risk to local

manufacturing base and appealed for urgent government, industry

stakeholder intervention, KAP's Feltex auto business (not covered) noted an

improvement in new vehicle assembly volumes in the half to Dec 25.

• Our Banks analyst, James Starke, highlights increased pressure on used-car

collateral values, thus providing less support for VAF books. Nedbank has

the highest VAF market share (35% of market) with VAF comprising 17% of

the bank's total loan book.

• WeBuyCars (not covered) has highlighted that the influx of competitively

priced Asian brands created a deflationary headwind for its used-vehicle

business. In 2025, its inventory write-down increased to 3.0% of stock from

1.7% in the prior period. The company has argued that, while China and India

will likely continue to grow market share, a growing pool of vehicles could

ultimately be positive for its used-car flywheel.

• Motus (not covered) and Supergroup (not covered) have pivoted car

dealerships to include Chinese and Indian brands.

RMB | Morgan Stanley 3