Beijing Automotive Works South Africa (BAW SA), a subsidiary of Beijing Automobile Industry Holding Company (BAIC) in China which produces taxi vehicles for the domestic and sub-Saharan markets is the latest new comer in the South Africa taxi industry. Their new 16-seater minibus taxi, known as Sasuka, was officially launched in November 2012. This saw the first ever Chinese investment in the South African light motor vehicle industry.
In an interview with NF Online, the Chief Executive Officer of BAW SA, James Chung, explained why they decided to come to South Africa, how they chose their plant base, marketing strategy and challenges they have faced thus far.
What made you decide to come to South Africa?
There is a huge market in South Africa when it comes to the taxi industry. We saw a huge gap in the market particularly because mini taxis are a crucial form of transport, school children and adults use it to travel to school and work. The consumer market in this country is also good because it give new brands an opportunity, no matter which category a brand is in.
Did you receive assistance from the government when you arrived?
BAW SA was supported by the Industrial Development Corporate (IDC) which is a government sponsored department that assists in financing new industries. South African government have plenty of organisations and departments that aid new emerging companies, particularly in manufacturing. Overseas companies are heavily supported because of job creation which is still a big problem in this country.
BAW SA holds 51 per cent shares, whilst the IDC and China Africa Motors (CAM) hold the remainder.
Why choose Springs as your manufacturing hub?
Gauteng is the best place to set up, especially for our product. Springs happens to be at the centre of Pretoria and Johannesburg. We would also like to utilize the airport when we grow and expand, transporting to neighboring countries like Botswana, Zimbabwe, Mozambique and so forth.
What challenges have you faced thus far?
We have not faced any major challenges yet but in the manufacturing business strikes are always a threat. In manufacturing we need plenty of workers and strikes reduce productivity and puts business on a halt. To counter this BAW SA has formed an in-house union because they handle matters at a quicker rate. We obviously welcome staff to join outside unions as well. BAW has weekly small meetings and in-depth meetings once a month. This allows for transparency between staff and management and to deal with issues affecting individuals and staff as a whole.
Another challenge is receiving finance from banks. So to counter this, BAW SA decided to have their own finance.
How did you market yourself in South Africa?
Instead of entering the South African market offering cheaper taxis, we took a different route. The company introduced back-up service for their taxis and added features that are valuable to passengers. The back-up service is completely free if you are financed by BAW SA.
We included air cons as one of the key features in our minibus taxis. You have passengers that prefer to have windows closed even in the heat whilst other passengers are sweating profusely in their suits. This feature is one of the reasons why we are so big in South Africa.
Have you expanded your dealership and how many employees do you have?
Because we have a huge market, we have grown our dealerships from 30 in 2013 to 37 in 2015. Our aim is to have 45 by 2018. Our staff members will obviously grow over time but for now we have about 200 staff members in this factory alone, 9 are Chinese nationals and the rest are South African.
The Sasuka is powered by a 2,7-litre petrol engine that delivers 110 kW of power at 5 200 r/min and 235 N.m of torque at 4 000 r/min. Passengers are entertained by the touchscreen on the console which not only operates the CD/radio but also a DVD player, which plays movies via a fold-down television screen mounted on the forward ceiling.
The vehicle features ABS brakes with EBD and retractable seat belts as BAW is determined to improve safety levels significantly.