Business / Motoring

S African pledges to support Chinese-funded automobile plant

(Xinhua) Updated: 2016-04-20 13:22

JOHANNESBURG - The Industrial Development Corporation (IDC), a South African state-run financial institution, pledged on Tuesday to financially support a joint venture with the Beijing Automobile Works Co Ltd (BAW).

The IDC will ensure that an automobile plant, known as BAW South Africa, receive funding from the IDC, IDC chief executive officer Godfrey Qhena told Xinhua after an inspection tour to the plant in Springs, west of Johannesburg.

The remarks came after reports of the IDC having failed so far to live up to its promise to fund the project, forcing the plant to stop production while the Chinese side has already invested billions of rand in the project.

Qhena denied allegations that the IDC was reluctant to invest in the joint venture as agreed upon.

The IDC and BAW signed an agreement to jointly fund the plant on the sidelines of the Johannesburg Summit of the Forum on China-Africa Cooperation in early December last year.

Qhena said the IDC will finance the plant to ensure its sustainability.

"All vehicles will be sold out, there is no problem," he said, without divulging when the funding will come into place.

He said the IDC is committed to partnering BAW with funds to ensure that the joint venture increase its production and create more jobs.

"This is an impressive and world-class plant which does not only have a potential to localize but to create more jobs which South Africa needs. They produce vehicles which most of our people use to ensure that they get to work timeously, comfortably and safer," Qhena said.

He assured that the IDC "will support BAW with a funding mechanism with a long term partnership".

Qhena stated that South Africa and China have cordial relations and such a partnership between the IDC and BAW will add to that.

"IDC will support this and welcome the investment by the Chinese company in the country. This shows confidence in the South African economy and we welcome that. This is a partnership and we are not reluctant to fund this," he said, adding the IDC will come up with a new funding mechanism where other partners will be invited.

BAW South Africa assembles vehicles, mainly 16-seated buses for the taxi industry. The company has 32 dealers selling their cars countrywide.

The manufacturer also offers a five-year warranty for main components of the car which include the engine, gearbox and differential, assuring vehicle security for passengers. A training for taxi drivers will also be introduced to ensure road safety.

BAW South Africa has also launched a car-renting program where South Africans rent their cars and do business, thereby supporting to create employment and support business of the taxi industry. Under the program, clients can take their vehicles for free service after 15,000 km.

This service is available 24 hours a day in six service areas in different parts of the country. The program, the first of its kind in the country, also provide clients with free service for brake pads and fuel system, which makes the country's taxi industry safer.

Paul Clark, the BAW South Africa national aftersales manager, told Xinhua that the program has seen 93 percent of BAW-produced vehicles serviced, the highest percentage in the country.

"Some of our clients did not believe when we told them in the beginning but now they have their vehicles serviced in our centres scattered all over the country. This makes the taxi vehicles safter, considering that many taxi drivers never have their vehicles serviced," he said.

Bradley Buck, a BAW dealer based in Durban, said the BAW vehicles are more popular with taxi owners in the country.

"Clients are also provided with DVD, car radios, blue tooth and air conditioning at the back and front and after-sale service, which are not provided by other suppliers selling similar products. There has been great acceptance of these (BAW) vehicles," he said.

Buck said he sells about 50 BAW manufactured vehicles, named Sasuka (meaning in Zulu "start"), a month and employees 30 taxi drivers, most of them driving Sasuka.

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