A R200-million local taxi assembly plant has been launched in Springs, Ekurhuleni, and is expected to create at least 500 jobs in the first phase.
The assembly project is one of the first deals between the Industrial Development Corporation (IDC) and Beijing Automotive Works (BAW) under the bus, truck and minibus programme initiated by the department of trade and industry in 2010.
"The investment underlines the continued strong cooperation between the Brics countries," Geoffrey Qhena, chief executive of the IDC told reporters at the launch in Springs.
The total project investment is estimated at R196-million, with the IDC contributing R22.9-million in equity debt facilities to the tune of R98.6-million.
"The assembly plant is expected to provide many benefits to South Africa, including increased localisation of the automotive industry and export opportunities," Qhena added.
The plant will assemble the new 16-seater minibus taxis and will include a two-year or 200 000 kilometre service plan to ensure "the taxis are affordable and safe".
The first phase of the project will create 500 direct jobs at the manufacturing plant, while more employment opportunities are expected to be generated in the project's second phase when sales and extended services related to the taxis commence.
The first phase of the assembly plant will be launched immediately and involves the establishment of manufacturing facilities in the New Era industrial compound in Springs.
This announcement comes just three months after Toyota South Africa opened its R70-million Ses'fikile minibus taxi assembly line at its manufacturing plant at Prospecton in Durban.
The plant has begun variant production of the popular 16-seater Quantum, which has one seat more than the imported 15-seater version.
"It's an interesting situation," Jeff Osborne, Retail Motor Industry chief executive told the Mail & Guardian.
"We have seen a significant level of investment as of late into the South African automotive industry and this can only be good for the economy."
Osborne said that while it might not be a welcome development for other automotive manufacturers operating in South Africa, it's a positive development for the industry.
"Its challenging but necessary and it will compliment South Africa as an investment and manufacturing destination.
But Osborne was candid about the need for the new vehicles to meet safety standards.
"Whatever type of quality emerges from the plant should be commensurate in terms of what the market standards are in terms of safety and durability.". .