Nov 13, 2012
Beijing Automotive Works opens taxi plant in SpringsBack
Engineering|Africa|BAW SA|BAW South Africa|Beijing Automotive Industry Holding Company|China Africa Motors|Concrete|Industrial|Industrial Development Corporation|Motors|Road|Roads|Safety|System|Toyota South Africa Motors|Africa|China|South Africa|Automotive|In-car Television|Machinery Products|Manufacturing|Manufacturing Industry|Metal|Motors|Product|Products|Service|Services|Ebrahim Patel|Infrastructure|James Chung|John Jessup|Ma Chuanqi|Mazwi Tunyiswa|Motors|Wei Jiang|Motors|Operations|Quantum|South Africa
© Reuse this
The local arm of the Chinese company, BAW South Africa (SA), on Tuesday cut the ribbon on its R200-million semi-knockdown (SKD) plant in Springs, on the East Rand, in a complex that previously produced telephones.
The renovated facility would have the capacity to produce 9 600 minibus taxis a year.
BAW’s parent company, Beijing Automotive Industry Holding Company (BAIC) would hold 51% in BAW SA, with the balance held by the Industrial Development Corporation (IDC) and James Chung and his family.
The IDC was contributing equity of R22.9-million, as well as debt facilities of up to R98.6-million.
Chung, a Chinese South African, owns China Africa Motors (CAM), which imported the CAM Inyathi minibus into South Africa from BAW in China.
There are around 20 000 CAM/BAW vehicles currently on the road in South Africa. CAM started operations in South Africa in 2005.
“I invited BAW into the country,” Chung, now BAW SA CEO, told Engineering News Online. “We needed the capacity to start a localisation programme.”
BAW’s investment into the local taxi industry followed that of Toyota South Africa Motors (TSAM), which earlier this year restarted local taxi assembly on the back of government’s new incentive programme to localise truck, bus and minibus production in South Africa.
TAKING AIM AT TOYOTA
BAW SA sales and marketing head John Jessup indicated on Tuesday that the Chinese manufacturer indeed intended to go head to head with TSAM in the local minibus taxi market, where the Japanese manufacturer was currently the market leader with its Quantum product.
Jessup noted that the “market leader’s” product sold for around R300 000, which could escalate to R400 000 when interest was added to the price tag.
He said this hindered new entrepreneurs from entering the taxi market. High parts, service and replacement costs also ensured that vehicles were not serviced as often as they should be, which then jeopardised passenger safety, “perpetuating a vicious cycle”.
“We want to create new thinking in the taxi industry,” noted Jessup.
BAW SA’s new 009 model taxi would be sold in South Africa from next year, and would “match the market leader in every way”, he promised.
The 16-seater product, the Sasuka, would feature an antilock braking system, electronic brake-force distribution, increased space, as well as air-conditioning, with in-car television also under investigation.
More importantly, said Jessup, the 009 would be 25% to 30% cheaper than Toyota’s Quantum, with parts set to be priced 50% cheaper.
The vehicle would also be sold with a two-year, 200 000 km service plan included in the price. Services could be done at any dealer, or the owner could opt for an express one-hour service at a taxi rank.
BAW SA would also offer finance to prospective buyers, in partnership with Absa, in a move which Jessup said would increase finance approval rates for BAW products.
In addition, remanufactured vehicles – such as in the case of a repossessed taxi, for example – would be made available in a “new market space” of between R100 000 and R120 000, he added.
He emphasised that the local taxi industry needed “more affordable, more interesting, more safe and more reliable vehicles”.
BAW SA had 25 dealers on board, said Jessup, while there were 5 service dealers in rural areas.
Minister of Economic Development Ebrahim Patel said at the plant opening on Tuesday that the BAW investment was “a concrete step in the move to reindustrialise South Africa”, and to “recapture the wealth created off a platform of the productive sectors of the economy”.
He noted that BAW had indicated that it was interested in expanding on its current investment to move from SKD production to completely knock-down production, which would mean greater use of local parts.
However, this expansion was dependent on sales volumes.
Patel said a Phase 2 expansion at the Springs site would mean another R2-billion investment, and 1 500 additional jobs.
South Africa’s taxi market currently sold around 22 000 vehicles a year, and was expected to grow to 28 000 vehicles by 2015.
There were around 200 000 minibus taxis on South Africa’s roads.
“The reality is that around two-thirds of South Africa’s taxi demand would be assembled in South Africa as from next year,” said Patel.
He also noted that government was hoping for increased “price competition” and innovation in the local minibus taxi market through the opening of the BAW SA plant.
“Taxis are a vital part of our public transport system. We require a market that makes affordable, safe and reliable vehicles.”
For BAW, increased taxi sales into South Africa would help BAIC to reach its goal of selling three-million vehicles a year by 2015.
BAIC was currently China’s fifth-largest automotive group, noted BAIC chief financial officer Ma Chuanqi.
Chinese embassy commercial counsellor Wei Jiang noted at the ribbon-cutting that trade between South Africa and China had increased by 37% from January to September this year compared with last year, to $44.7-billion.
He added that China had invested $8-billion in South Africa’s automotive, communications and financial markets by the end of 2011.
Jiang also noted that South Africa was “the perfect link-point to other countries on the continent”, as it offered good governance, rule of law and good infrastructure. He described China and South Africa’s relationship as one of “great friendship and political trust”.
Edited by: Creamer Media Reporter© Reuse this Comment Guidelines (150 word limit)
Other Intellectual Property Law News
Pedestrian Door Solutions specialists, ASSA ABLOY Entrance Systems South Africa (Pty) Ltd., have supplied and installed a number of Besam entrance systems to medical facilities both in South Africa and outside the country’s borders that offer fast, convenient and...
Rubber-in-compression couplings, from Renold Hi-Tec, provide fail-safe operation on applications such as mine winders, hoists, draw-works on drilling rigs and industrial overhead cranes. The intrinsically fail-safe construction of the couplings protects both people...
Engineering, management and specialist technical services company Aurecon achieved a first in Tshwane in 2011 when its Lynnwood Bridge Office Park building, situated just off of the N1 highway, achieved a 4 star GreenStar SA – [Office Design v1, Office Design v1]...
Updated 4 hours ago South Africa could face another delay in its already years-delayed digital migration project if government adopted the much-disputed conditional access (CA) for the set-top boxes (STBs) required to intercept digital broadcasting frequencies. Emerging black-owned...
Updated 4 hours ago JSE-listed real estate investment trust Dipula Income Fund has entered into agreements to acquire the Umzimkhulu Shopping Centre, in KwaZulu-Natal, as well as the Corporate Industrial Park, in Polokwane, from two different vendors for R336-million. The industrial...
Updated 4 hours ago Domestic new vehicle sales in February increased by 1.1%, to 52 368 units, compared with the same month last year. Statistics released by the Department of Trade and Industry on Monday show that new passenger car sales grew by 1.5% in February, to 34 909 units.
Recent Research Reports
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
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.
This Week's Magazine
Subscribe to Engineering News and Mining Weekly for two years, but only pay for the first year. The weekly editions of Engineering News and Mining Weekly will be posted to your preferred postal address and also gain access to:
National flag carrier South African Airways (SAA) is in an advanced stage of renegotiating its deal with European airliner manufacturer Airbus to acquire A320 single-aisle (or narrow body) aircraft. The aim is to replace ten of the aircraft still on order with five...
Worldwide, the main thrust in the ports industry over the past decade or more has been to increase efficiency. Traditionally, ports have been run by engineers and mariners and, in the past, increasing a port’s capacity was achieved by expanding the harbour. “That has...
What do you do when an elephant has a toothache? You call Dr Gerhard Steenkamp from the University of Pretoria’s (UP’s) faculty of veterinary science, Onderstepoort, one of only two elephant ‘dentists’ in the world.
The 2015 Sanlam/Business Partners Entrepreneur of the Year (EOY) competition was launched earlier this month in Johannesburg, with the main focus on creating and inspiring entrepreneurs to create jobs and boost the economy.