Toyota South Africa Motors (TSAM) on Friday officially restarted minibus taxi assembly in South Africa, with a R70-million investment to enable semi-knockdown (SKD) production of a 16-seater Quantum Ses’fikile – one seat more than the previously imported 15-seater minibus.
The investment created 90 direct jobs at Toyota, and 210 jobs at suppliers and service providers, and would see the assembly of 40 taxis a day on a single shift operation, or 10 000 units a year.
The investment followed 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 that 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 allowed SKD assembly of minibus taxis to qualify for incentives.
Under normal circumstances, the AIS, which was a chapter of the new Automotive Production and Development Programme, would support 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 would expect taxi assemblers taking advantage of the scheme to convert to CKD taxi assembly, which demanded more localisation.
Davies said this "flexibility" was allowed in order to "kickstart" minibus manufacturing in South Africa.
He added that a local taxi assembly industry could 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 was also pushing for preference to be given to locally assembled taxis under the Department of Transport's taxi recapitalisation programme, which provided financial support to the taxi industry in 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, less than a 100 were made in South Africa. This was a situation we desperately needed to turn around."
The local minibus industry contributed R30-billion to South Africa’s gross domestic product a year, transporting nine-million people.
Davies said he believed the support programme 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."
MORE TO COME?
TSAM assembly division 3 VP Fezile Myoli said the local arm of the Japanese manufacturer would produce two taxi derivatives in Durban, namely the 2.5-litre diesel and 2.7-litre Ses'fikile petrol models.
"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 said it took 18 months to roll out the assembly line. Local content on the project was low at the start of the project, with only the starter motor, glass and battery locally sourced.
TSAM president and CEO Dr Johan van Zyl said a second phase in the taxi project could see the assembly line incorporate other product derivatives, such as a panel van. It would also include greater local content.
South African National Taxi Council (Santaco) general secretary Philip Taaibosch noted that it had 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 had 187 000 members, buying around 35 000 new taxis a year, he noted.
He said taxi owners on average replaced their vehicles every 15 years, but added that Santaco had been pushing for a replacement cycle of 7 years.
"The industry is still growing. It had never stopped growing."
The pricing of the Ses’fikile remained the same as the imported product, with the added seat provided at no extra cost.