Beijing Automobile Works SA, a joint venture involving China's fourth-biggest vehicle manufacturer and South Africa's Industrial Development Corporation, has opened a minibus taxi assembly factory east of Johannesburg in a R196-million investment that moves the country one step closer to full manufacture of taxis.
"We see the assembly of taxis as a step towards full localisation and manufacture of taxis in South Africa," Economic Development Minister Ebrahim Patel said at the launch of the first phase of the new factory in Springs.
"It is envisaged that this project will not only supply the South African market, but also create export opportunities to the rest of Africa - a consumer base of one billion people on a continent registering some of the fastest growth rates in the global economy."
Localising the minibus manufacturing industry
South Africa's minibus taxi market is currently dominated by the Toyota Ses'fikile, which has been assembled locally since July, when Toyota launched a R70-million minibus taxi assembly line at its factory in Durban.
According to Patel, these moves to localise the minibus manufacturing industry would see about two-thirds, or nearly 16 000, of the local demand for 23 000 new minibus taxis a year being assembled in South Africa.
"While there are about 200 000 taxis on the road in South Africa, it is estimated that there are a further 100 000 in the rest of the Southern African Development Community (SADC), with an annual demand of about 12 000 taxis, or about 50% of the annual demand in South Africa," he added.
Beijing Automobile Works (BAW), a subsidiary of Chinese state-owned Beijing Automotive Industry Holding CompanyÂ‚ China's fourth-biggest vehicle manufacturerÂ‚ is a 51% shareholder in BAW South Africa, with the Industrial Development Corporation (IDC) holding 24.5% of shares and the balance belonging to China Africa Motors.
BAW South Africa chief executive James Chung said the project was one of the first significant investments by a Chinese vehicle manufacturer in South Africa's automotive industry.
The Springs factory will assemble the new 16-seater minibus taxis designed and developed under the international BAW brand. Chung said the vehicles would include a free two-year, 200 000-kilometre service plan to ensure that they were both affordable and safe.
The factory, with an annual capacity of 9 600 vehicles, will produce taxis on a semi knocked-down (SKD) basis over the next three years before progressing to completely knocked-down (CKD) manufacturing at greater capacity levels.
Bus, truck and minibus programme
IDC chief executive Geoffrey Qhena said the joint venture fell under the Department of Trade and Industry's local bus, truck and minibus programme, and would provide many benefits to South Africa, including increased localization of the automotive industry and export opportunities.
Qhena added that the investment underlined the growing cooperation between the BRICS (Brazil, Russia, India, China and South Africa) grouping of countries.
Minister Patel said the Springs plant would create 470 jobs in its first phase, and more over the next few years as the company increased its level of localisation.
"This investment supports the New Growth Path goals of increased industrialisation and shifting South Africa away from reliance on imports of manufactured goods," Patel said.
He added that the skills development component of the project would include extensive training of employees by BAW over the first two years, as well as employees receiving training at BAW's plants in Beijing.