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Santaco reaches deal with BAW SA on Inyathi taxi plant

The taxi industry has reached agreement with Beijing Automotive Works (BAW) South Africa that will allow the Chinese company to continue producing the Inyathi minibus vehicle at its new R196 million assembly plant in Springs.

However, the agreement reached with SA National Taxi Council (Santaco) is subject to several conditions.

131112 Beijing Automobile Works (BAW) official launch of their new plant in Springs Ekhurhuleni.photo by Simphiwe Mbokazi 453. Credit: inlsa

This follows BAW SA deciding on Monday to halt production after Santaco indicated it would not support the sale of the Inyathi to its members.

The BAW SA plant was officially opened last week.

Simon Magagula, Santaco’s deputy general secretary, said yesterday that an agreement had been reached with BAW SA and the Industrial Development Corporation (IDC).

Magagula said in terms of this agreement, Santaco’s support for the Inyathi was subject to this vehicle being assessed and receiving at least a three-star rating from Independent Transport Advisory Services (Itas). In addition some of the profits from BAW SA must flow to the taxi industry in the form of a taxi empowerment initiative, such as into education and training.

Itas was established in 2010 and produces a scorecard of “fit for purpose” vehicles for the industry.

BAW SA is 51 percent owned by Beijing Automobile Industry Holding Company in China, with the balance of the shareholding held equally by the IDC and China Africa Motors (CAM), the previous importer and distributor of BAW taxi vehicles into South Africa under the CAM brand.

A joint statement by Santaco, BAW SA and the IDC said yesterday that they had resolved any outstanding issues and misunderstandings regarding the plant.

“All parties understand the significance of the investment, particularly in terms of both job creation and localisation. The plant will commence with the production of the 009 [Inyathi] minibus taxi model.

“The parties have resolved to work together to ensure continued plant safety and that technical standards are met,” the statement said.

Magagula said the taxi industry had had severe problems with the Inyathi minibus in the past, resulting in many of them being repossessed.

If the vehicle did not receive at least a three-star Itas rating, BAW SA would have to fix what was wrong to bring the vehicle up to this rating level.

Without the rating, Santaco would not market the vehicle to its members nor recommend to banks that they finance purchases by taxi operators.

He said Itas did not only rate the vehicle but also the importer or manufacturer and dealers in regard to back-up and the availability of spares.

Magagula said Santaco did not specify any quantum for the investment in an empowerment initiative and stressed Santaco was not looking for equity in BAW SA or any other motor manufacturer.

He said Santaco had “burnt its fingers horribly” in the past when it invested in GAZ Motor Corporation of Southern Africa and the taxi industry then also became “the enemy of every other original equipment manufacturer”.

GAZ was a joint venture with McCarthy Motor Holdings that imported and distributed the GAZelle taxi vehicle.

The vehicle’s launch into the country was marred by a host of mechanical and quality problems.

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