Investors hitch up to taxi sector

With an annual revenue estimated at nearly R40-billion, the South African taxi industry is drawing attention from both local finance firms and global automakers.

Nissan this month started selling taxis in South Africa after an 18-year hiatus, looking to challenge Toyota's dominance.

"If the taxi industry were to stop completely, there's no cleaner at your house, there's no coffee at work, there's no workers on the work floor," said Nkululeko Buthelezi, CEO of the South African National Taxi Council.

The industry sprang up during white minority rule, when black people had to live in townships kilometres away from the cities and where the bus service was spotty.

Since 1994, taxis have grown into arguably South Africa's largest black-owned sector, with around 250000 vehicles and directly employing 600 000 people.

The average owner has 2.5 vehicles and employs drivers for the vehicles. The industry transports around 15 million people a day.

Nissan, a major player until a regulatory change in 1996 prompted it to abandon the market, is aiming to sell up to 400 units a month of its new NV350, which starts at R307 000, just under the R312 100 for Toyota's Quantum.

So far Toyota has been able to fend off rivals. Chinese automakers tried to muscle in, but their low-priced vehicles haven't been able to take the punishment, owners said.

The battle is on. Super Group yesterday announced that it was buying a 50.1% stake in the local business of the Chinese brand Great Wall Motors, which has become a well-known sight on South African roads, especially as minibus taxis.