Jul 20, 2012
SA amends incentive to help restart minibus taxi assemblyBack
DURBAN|Africa|Diesel|Motors|PROJECT|Roads|Toyota South Africa Motors|Africa|South Africa|Toyota’s Durban Plant|Automotive|Manufacturing|Minibus Manufacturing|Motors|Product|Products|Safer Products|Service|Transport|Johan Van Zyl|Motors|Philip Taaibosch|Rob Davies|Motors|Diesel
© Reuse this
The investment created 90 direct jobs at Toyota and 210 jobs at suppliers and service providers, and will see the assembly of 40 taxis a day on a single shift operation, or 10 000 to 15 000 units a year.
The investment follows a request by government for TSAM to restart local production of a local minibus taxi, halted in 2007.
Trade and Industry Minister Dr Rob Davies noted at the opening of the assembly line at Toyota’s Durban plant that the investment would receive government support under the Automotive Investment Scheme (AIS), through a new mechanism that allows SKD assembly of minibus taxis to qualify for incentives.
Under normal circumstances, the AIS, which is a chapter of the new Automotive Production and Development Programme, supports only completely knockdown (CKD) assembly.
“We are amending the AIS to provide support levels to this endeavour. It will be completed in the next few weeks,” said Davies.
He noted, however, that SKD assembly would only be supported until March 2015, by which time government expects taxi assemblers to take advantage of the scheme to convert to CKD taxi assembly, which demands more localisation.
Davies said this “flexibility” is allowed in order to “kick-start” minibus manufacturing in South Africa.
He added that a local taxi assembly industry can feed vehicles into a broader African market, especially under a pending free trade agreement, still being negotiated, between 26 countries on the continent. His department is also pushing for preference to be given to locally assembled taxis under the Department of Transport’s taxi recapitalisation programme, which provides financial support to the taxi industry when replacing their vehicles with newer, safer products.
The South African registered minibus taxi industry numbered 280 000 units in 2009, with the yearly purchase of new taxis at 19 000 units in the same year, said Davies.
“Of these, fewer than 100 were made in South Africa. This was a situation we desperately needed to turn around.”
The local minibus industry contributes R30-billion to South Africa’s gross domestic product a year, transporting nine-million people.
Davies said he believed the support pro- gramme for minibus taxi assembly could secure R1-billion in investment in total, creating around 2 000 jobs.
“We would like to see other companies follow suit and bring minibus production to South Africa.”
“It really makes sense to produce it here because of its popularity.”
It is estimated that there are currently 250 000 Toyota minibus taxis operating on South Africa’s roads.
Myoli says it took 18 months to roll out the assembly line. Local content on the project is low at the start of the project, with only the starter motor, glass and the battery locally sourced.
TSAM president and CEO Dr Johan van Zyl says a second phase in the taxi project may see the assembly line incorporate other product derivatives, such as a panel van. It will also include greater local content.
South African National Taxi Council (Santaco) general secretary Philip Taaibosch notes that it has always been the council’s ambition to again see taxis assembled in South Africa, especially as it contributed to job creation.
“We must compliment Dr Van Zyl and Toyota on the decision they have made to again assemble taxis locally. We are delighted”.
Santaco has 187 000 members, buying around 35 000 new taxis a year, he noted.
Edited by: Martin Zhuwakinyu© Reuse this Comment Guidelines (150 word limit)
Other News This Week News
Recent Research Reports
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
This Week's Magazine
South Africa remains an important manufacturing and export platform for Ford Motor Company, says executive chairperson Bill Ford. However, he adds that other countries on the continent are “becoming interesting”, and that the US carmaker is casting its net wider for...
Germany’s Max-Planck-Society (MPG) and the Max-Planck-Institute for Radio Astronomy (MPlfR) are investing €11-million (about R150-million) into South Africa’s MeerKAT radio telescope array programme. The money will be used to design, build and install S-band radio...
Infrastructure spend in sub-Saharan Africa will grow from $70-billion in 2013 to $180-billion by 2025, says PwC capital projects and infrastructure Africa leader Jonathan Cawood. This is one of the findings of PwC’s Capital Projects & Infrastructure report on East...
Private-owned defence and aerospace manufacturer Paramount Group and the Ichikowitz Family Foundation unveiled its Anti-Poaching Skills and K9 Training Academy in Magaliesburg last month.
The inclusion of Bluetooth to provide sub-three meter accuracy and heightened functionality for users is one of the ways to change existing wireless networks into engagement networks. An engagement network differs from common wireless networks in that it enables the...