HAVING overcome his fear of soaring human resource and rental costs, Vukile Sokoyi finally took the plunge in February 2018 and opened his automotive business, Soma Workshop in East London with just four employees.<\/p>\n\n\n\n
Now servicing an average 130 cars a year, Soma Workshop is a thriving operation which services cars, does engine overhauls, car diagnostics and fixing car suspensions – a far cry from the 10 cars it saw in its first year.<\/p>\n\n\n\n
The staff complement has also grown to 14 permanent employees comprised of eight qualified mechanics, three administration staff and three assistant mechanics who will write their trade tests later this year.<\/p>\n\n\n\n
Sokoyi has now added towing services to his business after acquiring a tow truck worth R915,069 through the Eastern Cape Development Corporation-managed R50 million Automotive Operator Blended Finance Scheme.<\/p>\n\n\n\n
Launched in 2024, the scheme is aimed at emerging Eastern Cape-based micro, small and medium-sized automotive component suppliers and aftermarket service providers. It funds fixed fixtures, equipment, machinery, stock and other distinct critical industry compliance or operating environment improvement measures such as a specific accreditation or growth programme, or specialised training.<\/p>\n\n\n\n
\u201cWe are delighted to be one of the first recipients of this scheme which bridges current funding gaps facing small and medium operators. Funding for this R915,069 tow truck was offered on a 70% loan and 30% incentive basis. It introduces an important additional revenue stream for us.<\/p>\n\n\n\n
\u201cThis is the most significant funding injection we have ever received since I founded the business in 2018. The scheme has bridged an important funding gap faced by small businesses such as mine,\u201d explains Sokoyi.A project manager and civil engineer by profession, Sokoyi worked as a contract manager for various companies before delving into mechanical engineering.<\/p>\n\n\n\n
\u201cI wanted to see if my foray into mechanical engineering would pay off. I will be writing my mechanical engineering exams soon. What strengthened my resolve to push ahead was the turnaround we experienced in 2019 with significant growth in turnover, even doing well during the COVID-19 period. We started getting government contracts conducting fleet maintenance which we still service today. We are held in high regard by our clients because of the high quality of our workmanship. We have already serviced about 100 cars in the first six months of this year. We service clients such as the Buffalo City metro, Great Kei Local Municipality, Amathole District Municipality, Department of Transport as well as the local South African Police Service,\u201d says Sokoyi.<\/p>\n\n\n\n
ECDC chief executive officer, Ayanda Wakaba, says the scheme is offered on a 70% loan and 30% incentive basis to applicants who must be individuals and\/or companies who have been in operation for 12 months and who are majority black owned. The minimum disbursement figure for the blended finance scheme is R300 000 with a maximum of R1 million.<\/p>\n\n\n\n
\u201cThe focus on this segment of the market is a bid to bridge current funding gaps facing small and medium operators due to resource constraints, lack of an elaborate business history, lack of collateral, informal nature of business operations, and barriers to market which affect access to opportunities.<\/p>\n\n\n\n
\u201cThe blended finance scheme intends to increase the number and size of the operations of emerging automotive component suppliers and aftermarket service providers, while transforming others into large-scale automotive operators,\u201d says Wakaba.<\/p>\n\n\n\n
Wakaba says this segment of the market is ripe for meaningful support considering that the Eastern Cape\u2019s Original Equipment Manufacturers (OEMs) and component suppliers employ about 60,000 people.<\/p>\n\n\n\n
\u201cThe Automotive Operator Blended Finance Scheme intends to exploit the potential of the sector by using this funding instrument to attract more service opportunities for this targeted group. The blended finance approach is meant to stimulate the sector and support increased job creation security among micro, small and medium operators,\u201d Wakaba says.<\/p>\n\n\n\n
National President of the Johannesburg headquartered African Panelbeaters and Motor Mechanics Association, Sisa Mbangxa, says the scheme is the first of its kind directly targeted at emerging automotive component suppliers and aftermarket service providers.<\/p>\n\n\n\n
\u201cAccess to finance packages like these helps emerging suppliers to compete effectively in the automotive industry. This is good news for our 85 members in the Eastern Cape and by extension the 350 members that form part of our national footprint. We have a provincial office in East London and another in Ngcobo servicing members who are panel beaters, mechanics, auto electricians, spares suppliers as well as fitment centres,\u201d Mbangxa says.<\/p>\n","protected":false},"excerpt":{"rendered":"
HAVING overcome his fear of soaring human resource and rental costs, Vukile Sokoyi finally took the plunge in February 2018 and opened his automotive business, Soma Workshop in East London 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