Taizhou Zhongfu New Materials, a private company from Taizhou, Zhejiang province, founded by Ku Lun, a former Christmas garland exporter, has managed to break the long-standing Western monopoly on high-performance solid materials for deep-sea buoyancy.
The company was established in May 2012 and spent ten years and over 200 million yuan before achieving full-scale production around 2022. In 2024, a new production base was launched in Taizhou with an annual capacity of 10,000 cubic meters. By the end of 2025, the company captured over 30% of the domestic market and reached the break-even point.
The product is a specialized foam that provides buoyancy at depth. It wraps around cables, subsea equipment, and bathyscaphes to reduce weight, tension, and wear over its service life. The deep-sea grade material is designed to operate at full ocean depths up to 11,000 meters, withstands pressure of 150 megapascals, equivalent to 1,500 standard atmospheres. Its density is half that of seawater, meaning every ton of finished material generates one ton of effective net buoyancy, sufficient to keep a fully loaded SUV afloat.
This technology is particularly in demand in floating offshore wind farm projects. Off the coast of Wannian, Hainan, there is one of the world's largest commercial floating offshore wind energy projects, where turbines weigh thousands of tons and subsea cables exceed 20 kilometers. The solid buoyancy materials support the entire floating structure. Zhongfu's breakthrough is also applied in oil and gas platforms, underwater robots, and deep-sea scientific research.
The path to success was challenging. Early attempts at mass production were accompanied by sharp fluctuations in quality and low productivity. In 2014, Ku traveled with a team to the United States to establish a local R&D department, but around 2017, he faced charges of trade secret theft that lasted seven years before being dropped. This cost the company the best production window and a significant portion of its staff. Ku financed this decade using profits from his Christmas garland manufacturing business, reinvesting over 200 million yuan.
The turning point came in 2017 when a major domestic oil and gas company, aiming to localize deep-sea equipment supply chains, made Zhongfu a partner, setting requirements that met international advanced standards. After many years of refinement, the product passed acceptance, with some metrics surpassing imported counterparts, leading to the start of mass production.
Commercial viability is now clear. Imported high-quality buoyancy material cost approximately 180,000–190,000 yuan per ton with delivery times of nine to twelve months, and foreign suppliers could arbitrarily increase prices or delay shipments. Zhongfu's product costs more than 30% less than imports, and delivery times are reduced to three to four months. For deep-sea projects, where daily construction costs amount to hundreds of thousands of yuan, shorter supply cycles significantly reduce overall timelines. The company forecasts that production volume will reach 500 million yuan within three years. Ku continues to run the Christmas garland manufacturing business in parallel: the old business funds the new one.
In the first quarter of 2026, one of the five new cars sold in South Africa was of Chinese manufacture. This statistic seems incredible compared to a decade ago, when Chinese brands held a negligible share of the market, and some brands, such as Chery and Geely, left the country because they failed to gain consumer trust.
However, about five years ago, Chinese manufacturers returned with strong momentum and an effective strategy. Greg Cress, Head of Automotive and EV at Accenture in Africa, called it 'a breakthrough the industry has been waiting for a hundred years.' He compared the current situation to the arrival of the iPhone in the automotive industry, emphasizing that the observed changes are a structural shift, not just a cyclical phenomenon.
Data from the industry body Naamsa confirms this trend: Chinese manufacturers accounted for over 19% of total new car sales in the first quarter of 2026. Sales grew by 75% year-on-year, while growth in the passenger and light commercial vehicle segments was 12.7%.
In the passenger car market, the share of Chinese brands increased from 11.2% in 2024 and less than 9% at the beginning of 2023 to 16.8% in 2025. Naamsa, according to its 2026 Automotive Trade Guide, agrees with Cress, stating that this is not a short-term spike but a 'structural reset.' The market, which was defined by brand prestige for decades, is now being redefined by consumer choice driven by prices and limited family budgets.
The first wave of Chinese participants, including Chery, which appeared in the late 2000s, was forced to retreat and revise its tactics. However, the current second wave is characterized by a more structured, planned, and aggressive implementation. In 2024, eight Chinese brands were active in the market, and by the end of 2025, their number grew to 18, with plans to increase in 2026. Chinese brands now account for almost 40% of all passenger brands in local dealerships.
The strategy of these companies is based on three elements: offering mid-sized SUVs with high value at very aggressive prices, backed by longer warranties compared to established brands. Cress rejects the idea that this is simply a price war.
Sales figures demonstrate this trend. Chery, relaunched in late 2021 with the Tiggo 4 Pro model, sold 25,304 vehicles in 2025, a 26.7% increase, securing eighth place. GWM showed a growth of 43.7% and took sixth place, regaining the title of best-selling Chinese brand. If the sales of Chery, Omoda, Jaecoo, and Jetour are combined, their total volume exceeded that of Volkswagen Group at the beginning of 2026 and approaches Suzuki, which holds second place.
Consumer demand was stimulated by falling interest rates, record low inflation for new light vehicles (1.1%), and pension payouts. As a result, overall industry sales grew by 15.7% in 2025, reaching 597,338 units—the best figure since 2015. Furthermore, 64.2% of light vehicles sold cost less than 500,000 rand, which is the segment actively being captured by newcomers. Norman Lamprecht, Director of Trade and Research at Naamsa, noted that new players have achieved significant success in the small and entry-level segments.
The rise in popularity of Chinese brands coincided with a sharp drop in sales of German premium brands, which previously symbolized desired transportation in South Africa. Total sales of Audi, BMW, and Mercedes-Benz fell from slightly over 74,000 units in 2014 to less than 24,000 in 2024, representing a decline of 68%. Mercedes-Benz was hit hardest, with its annual sales over the decade shrinking by more than 80%, causing it to fall out of the top 10 sellers.
Cress believes that major German and Korean manufacturers likely cannot compete with the price level offered by Chinese companies. This forces them to retreat into the premium niche, but the question remains whether the volume and margin in this segment of the South African economy are sufficient to sustain production capacity.
South Africa is not only a car market but also a manufacturing base. In 2025, the industry contributed 5.2% to GDP, and the production of vehicles and components accounted for 23.8% of the country's industrial output. According to official Naamsa data, vehicle exports reached a historic high of 414,268 units, valued at 229.8 billion rand. Nevertheless, this record hides serious problems.
Exports to North America plummeted from 25,554 units in 2024 to 6,530 in 2025 after Washington introduced a 25% Section 232 tariff. Growth in supplies to Europe and the rest of Africa helped maintain overall growth. However, employment in manufacturing companies and component suppliers decreased. Data provided to TechCentral ahead of the Naamsa Q2 2026 review shows a 5% year-on-year drop in exports for this quarter, although Africa remains a bright spot.
Cress noted that BMW partially offset the US impact by redirecting X3 exports to Canada. Mercedes-Benz proved more vulnerable: its East London plant, which exports over 90% of its C-Class output, cut about 700 jobs in 2024 and suspended production for over a month in mid-2025. Reports indicate that GWM is negotiating joint plant usage, and the C-Class faces strong demand.
While truck manufacturers appear more resilient for now, even their positions are threatened by new powertrains, such as the BYD Shark plug-in hybrid. Toyota, whose Hilux assembled in Durban was a bestseller in 2025, is also considering a transition to a fully electric version, indicating the seriousness of the threat to traditional players.
Simultaneously, the domestic market is becoming increasingly reliant on imports. Light vehicle imports rose by 28.6% in 2025, exceeding 391,000 units, with China alone supplying over 91,000 vehicles. This influx caused a rift in the industry: former Naamsa CEO Mikel Mabasa called the influx a 'fantastic' signal for local assemblers, which drew sharp condemnation from the Numsa union, warning of factory closures and further job losses.
However, reports of potential import duties up to 50% on Chinese and Indian cars turned out to be exaggerated. Lamprecht explained that this was merely a statement regarding the maximum ceiling rate for customs duties under the World Trade Organization.
The key test to determine whether the Chinese wave will strengthen or deplete South Africa's industry takes place in Rosslyn, near Pretoria. Chery won an auction against GWM for the abandoned Nissan plant in January and officially opened it in July. The first locally assembled Chery vehicles are expected from mid-2027. BAIC began assembling components for its B30 SUV in Gqeberha, and GWM is exploring joint truck assembly.
Cress sees Rosslyn as the start of 'new energy vehicle reindustrialization.' The Chery deal 'essentially secured' the jobs of most of the approximately 800 workers and contractors remaining after Nissan's departure. The company is preparing to produce products significantly more advanced than existing local models. Since EVs produced at this plant are exempt from import duties, 'in the next two to three years we will see very competitive products from Chery.'
Nevertheless, there are limitations. A large part of employment in the automotive ecosystem is concentrated in component suppliers—manufacturers of clutches, gearbox parts, exhaust systems, and catalytic converters—'all products that will no longer be needed in the world of new energy vehicles.' Building a battery supply chain requires building a new infrastructure almost from scratch, and policy must stimulate this. Cress believes that cementing Chery's production roots is 'likely a necessary step, but whether it is enough is a question.'
Justin Barnes, Executive Chairman of the consulting firm B&M Analysts, describes this test in harsher terms: 'The key for the South African automotive industry is whether Chinese OEMs take South Africa seriously as a manufacturing base. If they do, they will surely fill any gaps in the local manufacturing landscape, but if not, we may expect further decline in the South African automotive value chain and continued growth in imports.' He notes that it is 'too early to draw conclusions, and the signs are still mixed,' although he calls Chery's acquisition in Rosslyn a 'positive development.'
What is happening in South Africa is part of a continental strategy. Having been excluded from the US due to 100% tariffs on Chinese EVs and facing high EU duties on the same vehicles, Chinese manufacturers have pivoted towards Africa. Chery's CEO in South Africa, Tony Liu, called the country 'the company's gateway to the African continent.'
Cress insists that South Africa should view this as an opportunity, not a threat. Chinese investment brings skills in electronics and high-voltage engineering and can form the basis for exporting to a continent that is electrifying faster than many assume. In his view, Africa should not become a 'dumping ground for internal combustion engine technology'; countries like Ghana, Rwanda, Ethiopia, and Kenya have progressive policies on electric mobility. However, competition for this role is very high, and 'Morocco can serve Europe much more effectively than us. We need to be even more competitive in our policy to not only retain existing brands but also attract more.'
Cress believes that New Energy Vehicles (NEVs) are more of an accelerator than the main topic right now. NEV sales grew by only 7.1% in 2025, accounting for 2.8% of the market. Then came the breakthrough: data ahead of the Naamsa Q2 2026 review shows that NEV sales jumped by 134.3% year-on-year, reaching 8,611 units, or 5.6% of total sales, surpassing the 5% mark for the first time. This was supported by new players such as BYD, which only started reporting sales in March 2026.
Independent demand data confirms this. According to the East Meets Electric report from OLX Group, demand for electric vehicles on AutoTrader grew by 154.6% in June 2026, the second fastest growth among the five markets tracked by the group. AutoTrader CEO George Mignay attributes this success to Chinese manufacturers 'offering cars that align well with local priorities regarding affordability, technology, and practicality.'
However, the same report underscores Cress's caution: South Africa shows the highest consumer demand for Chinese brands among all markets tracked by OLX—7.31% of inquiries led by Haval—but only 0.3% of this demand is for electric vehicles, as buyers prefer gasoline and hybrid SUVs.
Tony Liu stated: 'Based on our experience in China, once the share of new energy vehicles reaches almost 10%, demand will explode.' Cress added that if Chery builds a full EV in Rosslyn, it will set an example for other OEMs. Cress concluded: 'The question is not whether Chinese brands should be here in South Africa. I think consumers have already given the answer.'
