EXCLUSIVE: Taxi protest to target BAW, Sasol and Fourways Mall

JOHANNESBURG – Vehicle manufacturer Beijing Automotive Works (BAW), a subsidiary of Beijing Automobile Industry Holding Company (BAIC) in China, Sasol in Secunda and the Fourways Mall are to be targeted in the next round of protests by the taxi industry.

The protests are related to the industry’s exclusion from the industry’s value chain. Informed sources in the taxi industry aligned with the Mass Taxi Industry Protest Action Committee, confirmed the industry was in the process of applying for permission to embark on the protests on September 13.

Further companies may be added to the list of targets. The committee, a splinter group of the SA National Taxi Council (Santaco), organised the blockade at Toyota South Africa’s manufacturing plant in Prospecton in Durban in May and that took place in June in Johannesburg and Midrand.

It also previously planned a protest action against government but that was postponed to allow negotiations to take place with various government officials and entities.

The taxi sources claimed BAW South Africa was established to produce taxi vehicles but was no longer assembling taxi vehicles locally and was only involved in the refurbishment of repossessed taxi vehicles. This was similar to the SA Taxi model, where it was more involved in the refurbishment of repossessed taxi vehicles than providing finance to taxi operators, they said.

The sources said the refurbishment initiative by BAW SA was launched because the taxi industry was no longer buying these vehicles because of their poor quality and frequent breakdowns and poor availability of replacement parts.

“People are gatvol with these vehicles and not buying them. Based on our records, they are now not doing any new sales. They are doing about 80 repossessions and refurbishments a month and 80 people are losing their livelihood a month,” they said.

Stock image: Taxi operators blockade streets in Johannesburg. The taxi industry plans to target three places of business in the next wave of upcoming taxi protests in South Africa. Picture: Dumisani Sibeko/ANA pictures

The taxi industry sources claimed that 948 of the total 2 561 BAW taxi vehicles sold between January 12 2013 and May 7 this year had been repossessed and the arrears on BAW SA’s taxi vehicle book totalled R142 million, with 58 percent of this overdue for more than 90 days.

They further claimed BAW SA was doing rental finance deals instead of instalment sale agreements to avoid the provisions of the National Credit Act. The protests at Sasol in Secunda are related to the taxi industry not being able to obtain any discount on the price of petroleum products despite being one of the largest users of fuel in the country.

The taxi industry is also up in arms about its inability to establish ring-fenced fuel service stations at taxi ranks for operators because of apartheid-era petroleum industry arrangements that mean another fuel service station cannot be established within 3km or 5km of an existing service station.

The planned protest against Fourways Mall is related to the lack of facilities at the mall for taxis that transport customers and retail store staff to and from the mall. BAW SA said that currently BAW was not assembling taxis as it was in the process of extending its factory from Semi-Knocked Down to Completely-Knocked Down assembly. This was in line with the government’s plans to support local employment and the expansion of the automotive components supplier industry, it said.

BAW said it recognised the importance of repossession refurbishment as had SA Taxi Finance.” As a result, we formed a separate division to perform this function. It is important to point out that for every 10 vehicles repossessed, BAW has successfully refurbished and return 8 to the market,” it said.

BAW said the allegation about poor quality was a untrue.” BAW has a free service plan, extended warranty to 500 000 km, and a vehicle off-the-road recovery programme. The offer of such guarantees would hardly be likely on a vehicle with poor quality.”

It said BAW, like most other taxi suppliers, was faced with repossessions typical of the taxi market mainly due to the high interest rates charged by other taxi financing companies, which were charging 15 percent above the prime rate – well above BAW.

Beijing Automobile Works opened a plant in Springs in Ekurhuleni. In the past two years, Chinese direct investment to South Africa has kept on expanding. File picture: Simphiwe Mbokazi

BAW and two local partners invested R196 million in 2012 in a new assembly plant in Springs to produce taxi vehicles for the domestic and sub-Saharan markets. It currently only assembles semi-knocked down (SKD) kits of the BAW 16-seater Sasuka taxi for the South African and sub Saharan Africa market.

However, BAW announced in May this year it planned to invest a further R250 million to expand and upgrade its vehicle assembly facility to a completely knocked down (CKD) assembler of Sasuka kits, expand its locally produced product range to include a school bus and panel van and widen its exports into Africa.

Approached for comment last month, Sasol said it was unaware of any planned protest by the taxi industry. The company added: “Sasol cannot comment on issues pertaining to the regulation of the fuel industry. As you are aware, these fall under the ambit of the Department of Energy as well as the National Energy Regulator (Nersa).”

– BUSINESS REPORT

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