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New contender for SA taxi market

2012-11-14 07:50

NOW IN SPRINGS: BAW South Africa has set up shop in Springs from where it will produce minibus taxis for the local market.

CAPE TOWN - BAW South Africa has, what it calls, an “affordable and accessible” solution to public transport woes and, as a bonus, it’s manufactured locally.

Springs on Gauteng’s East Rand is the site of the new development – the first direct Chinese investment in South Africa’s light commercial vehicle segment.

BAW SA is a partnership between Beijing Automotive Industry Holding Company (BAIC), the Industrial Development Corporation (IDC) and China Africa Motors (CAM) and the result of an IDC mandate by government to find an equity partner to manufacture minibus taxis locally.

GLOBAL PARTNERSHIP IN ACTION


This partnership falls under the local bus, truck and minibus programme initiated by the Department of Trade and Industry in 2010, the IDC said.

BAW SA’s minibus taxi assembly project will see an estimated total investment of R196-million from all stakeholders with BAIC holding a 51% shareholding.

The manufacturing facility will employ 469 people and, including suppliers and dealers, the project is expected to employ more than 1000 new jobs. The plant has an annual production capacity of 9600 vehicles.

BAIC is China’s fifth-largest automaker and already holds joint ventures with Mercedes-Benz and Hyundai, while it exports vehicles to South East Asia, Africa, South America, the Middle East and Russia.

John Jessup, head of sales and marketing at BAW SA said the establishment of the company was a real automotive milestone for the country.

Jessup said: “This enterprise brings with it new job creation and attractive product offerings in all major vehicle market segments, starting with the taxi market where we will be establishing many industry firsts in terms of servicing, financing and professional factory vehicle refurbishing.

“But, most importantly, this investment is an important indication of long-term commitment.”

The manufacturing plant in New Era, Springs, will produce taxis on a semi knocked-down (SKD) basis but with a final line identical to that of completely knocked-down (CKD) manufacturing plant.

Jessup said he expected annual taxi replacement demand in South Africa to equal around 25 000 units, “then there is the sub-Saharan market, which will experience replacement demand in excess of this,” he added.
 
BAW South Africa’s Springs factory will be in its first phase of operations over the first three years, after which is is expected to move to full CKD manufacturing at greater capacity levels.
 
According to Jessup, the taxis are just the beginning for the company. “We will also be entering the LCV, SUV and passenger car markets from next year (2013),” he said, “although the decisions whether to fully import or locally assemble these models is still under review.”
 
The immediate focus, Jessup said, was appointing a dealer network. BAW SA will initially appoint 30 dealers in major centres and service dealers in rural areas.

“To date,” Jessup said, “25 full dealers and five service dealers have been appointed. I think we will easily end up with 35 to 40 quality dealers; the interest in the BAW brand is palpable.”

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