Joint venture on road to success in minibus market

Chung said the South African taxi market can use at least 18,000 new vehicles every year. These are expected to carry more than 7 million people, he said.

"The average lifespan of a taxi is seven years at the most, thereby creating the demand for at least 1,500 to 2,000 new vehicles every month," Chung said.

The Industrial Development Corp of South Africa estimates that annual taxi sales in South Africa will reach 28,000 units next year. It also said that 100,000 vehicles would be sold in the rest of southern Africa.

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Toyota sells 1,100 minibuses every month in South Africa, while BAW South Africa averages about 200 sales. Chung expressed confidence that monthly sales may soon reach 400.

Chung said brand promotion is the key to success but said other factors, like having more dealers, creating more jobs and expanding investment, are crucial to BAW in the long run.

The Chinese parent company already has spent 196 million rand ($27.5 million) on BAW South Africa, which has created more than 469 jobs, he said.

"The investment is also expected to add more than 1,000 new jobs for suppliers and dealers."

According to Chung, most of this investment was used to set up a taxi manufacturing plant in Springs, Gauteng province. The facility is expected to have an annual capacity of between 40,000 and 50,000 units by next year.

Long-term plans for the Springs plant involve an added investment of between 2 billion rand and 3 billion rand, said John Jessup, BAW South Africa's head of sales and marketing.

Chung said the company has a sizable number of local employees. "Nearly 95 percent of the 170 employees at the Springs facility are from South Africa. At present, we can make 1,500 minibuses every month at the facility."

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