Firm building a solid foundation

By Xing Zhigang and Li Jiabao (China Daily) Updated: 2014-06-03 07:11

Yue, from the parent company, said that unlike other brands, Shantui also enjoys several price advantages.

"Pricing is the most obvious way to attract more customers and gain acceptance," Chicken said. "But that alone is not enough. Companies also need to have the requisite infrastructure to keep the network ticking, especially in terms of support and services."

"South Africa is different from other African markets," Yue said. "Customers, such as those in developed markets,

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emphasize the manufacturer's comprehensive capabilities such as quality consistency, promptness of services and supply of spare parts as well as the global influence of the brand," Yue said.

Shantui has sold about 600 pieces of heavy equipment in South Africa, a market that has an estimated annual potential for 7,000 to 8,000 units, especially for mining and construction, Chicken said.

"We expect the South African market to pick up rapidly as the government has recently launched a national infrastructure development plan."

He said that demand will primarily come from infrastructure construction and agriculture, which is expanding because of rising food demand in South Africa and other African countries. Mining demand may remain flat in the long term, depending on demand from the coal sector.

"We are also taking the next step by setting up a full-fledged distribution network. The subsidiary model needs support from a robust distributor network, especially in terms of brand promotion and product placement. If we have a mature distribution network in place, we will be able to reach out and service more markets," Chicken said.

"It has been a slow and difficult process for Chinese companies to establish their products in South Africa. But the process has been much more easier than in other African markets.

"Chinese brands have made rapid strides in quality, especially during the past five years. This is remarkable, considering that it took more than 20 years for most of the Japanese brands to make a mark," he said.