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 Automotive News
Recent Research Reports
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.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
This Week's Magazine
The South African new vehicle market is likely to reach around 630 000 units in 2014, down from the 650 000 units recorded in 2013, says Toyota South Africa Motors (TSAM) president and CEO Dr Johan van Zyl. Van Zyl is also president of the National Association of...
Efforts by the Kenya government to increase energy generation by 5 000 MW over the next three years received a major boost following the award of a $2-billion contract to build a coal power plant in Lamu. Despite allegations of irregular tendering process, the...
Using crafty wordplay on a well-known Internet meme, brilliant South African-born US entrepreneur and businessperson Elon Musk announced that Tesla Motors would not initiate patent lawsuits against anyone who, in good faith, wanted to use its technology. Instead,...
August new vehicle sales declined by 1.4%, to 55 722 units, compared with the same month last year. Assisted by the car rental market, the South African new passenger car market, at 37 953 units, contracted by 1 047 units, or 2.7%, compared with August last year.
With South Africans facing the challenge of reducing electricity consumption, the biennial Eskom Energy Efficient Lighting Design Competition, to encourage the integration of energy efficient lighting in architectural, engineering and interior design, received a...