Baw invests in Springs, South Africa

This is the taxi BAW will pit against
Toyota's Sesfikile. 

South Africa's taxi associations too tough for BAW.
Beijing Automobile Works will no longer
invest in an assemble line to build Chinese taxis in Springs, as reported below.

THE first vehicle I drove with a BAW badge on the nose (for Beijing Automobile Works) was an amphibious troop carrier.

Originally developed for the Chinese army, the Isuzu-based floating bakkie was underpowered in every way, but still a huge thrill to launch down a high dam wall into deep water … where it serenely puttered along like an ageing barge.

Well, BAW is back, and this time round it is not to sell ageing military gear for booze cruises on game farms.

BAW South Africa yesterday announced “the first new light vehicle manufacturer, which is assembling and building vehicles in South Africa — in 40 years!”.

The company also said a Chinese company would make direct investment in the South African light vehicle motor industry — for the first time ever.

Their 40-year claim is somewhat vague — is it in SA, or just in Springs? For it is not the first in 40 years in South Africa by a long shot, with South Africa’s best-selling taxi — and BAW’s main competitor — the Sesfikile now being built at an assembly line which Toyota recently restarted in Prospecton.

The investment, however, is big news. Beijing Automotive Industry Holding Company (BAIC), the Industrial Development Corporation (IDC), and China Africa Motors (CAM) will invest R196 million in BAW South Africa, which it says will create jobs for 469 people.

“When one factors in suppliers and dealers, over 1 000 new jobs will be created,” said John Jessup, head of sales and marketing at BAW South Africa.

He added in a statement that BAIC is China’s fifth largest automotive manufacturer, with annual sales revenue of more than 200 billion RMB (R282 billion), sales of 1,54 million complete vehicles and a number one profit increase ranking amongst China’s six largest automotive groups.

Jessup said that the establishment of the company is a real automotive milestone for South Africa. “This enterprise brings with it new job creation and attractive product offerings in all major vehicle market segments, starting with the taxi market where we will be establishing many industry firsts in terms of servicing, financing and professional factory vehicle refurbishing.

“But, most importantly, this investment is an important indication of long-term commitment as opposed to ‘arm’s length’ importer/distributor agreements,” he said.

The manufacturing plant in New Era, Springs, will produce taxis on a semi-knocked-down (SKD) basis, but with a final line identical to that of completely knocked-down (CKD) manufacturing plant.

“These vehicles are responsible for 1,6 billion passenger trips in South Africa each year,” notes Jessup. He believes that there will soon be annual taxi replacement demand to the tune of 25 000 units in South Africa alone.

“Then there is the sub-Saharan market, which will experience replacement demand in excess of this,” he reports.

BAW South Africa’s Springs factory — with an annual capacity of 9 600 vehicles — will be in its first phase of operations over the next three years. Thereafter, the plan is for BAW SA to move to full CKD manufacturing at far greater capacity levels.

“Jessup said the taxis were just the beginning for the company. “We will also be entering the LCV, SUV and passenger car markets from next year,” he revealed, “although the decisions whether to fully import or locally assemble these models is still under review”.

But, for now, the focus is on appointing a quality network of dealers. “We are looking to appoint 30 dealers initially. They will be located in all the major centres, and we will have service dealers in important rural areas. We already have a very nice calibre of dealer on board.

“We are, for example, signing up existing ‘top-end’ German and Japanese dealers and many other highly reputable companies.

“To date, 25 full dealers and five service dealers have been appointed. I think we will easily end up with 35 to 40 quality dealers; the interest in the BAW brand is palpable,” Jessup reported.