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Kabelo Ramasedi, Product Owner
 


Sakhumzi Car Rental

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‘WE DON’T have cars and infrastructure to worry about. We only have customers to worry about, and so we do a lot of worrying about our customers.”

The speaker here is Kabelo Ramasedi, a 32-year-old Johannesburger, entrepreneur and the managing director of Sakhumzi Car Rental.

In 2006 she and two partners, Thulani Ngobese and Moraki Mogosi left their day jobs in the South African car-rental business to do their own thing. But car rental is a capital-intensive game dominated by big hitters with wide reaches and deep pockets. To get started in this once lily-white business, the young black upstarts needed capital; they reckoned on at least R50-million. The financial institutions reckoned they weren’t interested; not even in providing seed capital.

So Kabelo, Thulani and Moraki changed tack. They would do things differently, carve out a niche for themselves but without the huge investment in fleets and infrastructure. “For historical reasons, in South Africa, Hertz was struggling for market share and we believed we could add something to their business while growing our own,” says Kabelo.

One of the principal challenges anyone wanting to break into renting cars faces in South Africa is that, if you want to be in the corporate and inbound markets – where all the action is – you have to have a presence at airports. “And, even if they wanted to, Acsa [the Airports Company of SA] just doesn’t have any more space for new car-rental companies,” explains Kabelo. Another issue is what to do with rental cars after they reach their typical “sell-by” dates of nine months or 30,000km. The big car-rental operations are all part of bigger groups which have second-hand car retail businesses.

The strategy Sakhumzi took to Hertz was that the three partners would be its “foot soldiers”, finding corporate customers and then negotiating the best wholesale rate they could from the multinational. By “bundling” together big clients, Sakhumzi was able to quickly put a lot of business Hertz’s way, give their own customers a discount they weren’t expecting and make a small margin to get going.

The strategy worked and today Sakhumzi is turning over some R18-million a year. The business, based in Kensington in the eastern suburbs of Johannesburg, uses Hertz offices and vehicles but the sales and marketing and the all-important customer care are the responsibility of the Sakhumzi team. Through the partnership with Hertz Sakhumzi has access to the full range of vehicles – from economy run-arounds to luxury sedans and, when clients require them, minibuses and even coaches.

The creation of the six-member team (in addition to the three partners) and the fact that they have so quickly created meaningful employment is a particular source of pride for Kabelo. “We take empowerment very seriously. Empowerment isn’t about black people getting on the gravy train. Without empowerment, we’re going to have the same beggars on the street, the same poverty and the same crime. Sakhumzi is a business that is run by the youth of South Africa for the youth.”

Kabelo mentions Sakhumzi’s financial manager, who has a natural head for number-crunching but who had been working as a cleaner at Europcar. Given enough opportunity and investment in training, she’s blossomed in her new surroundings, now revelling in the responsibility and real empowerment her job gives her.

Immediately on the cards for Sakhumzi is creating a sales presence in KwaZulu-Natal, something that Kabelo expects to happen in early 2010. There are also plans to set up shop in Polokwane, Limpopo, where there is a lively but unsophisticated car-rental scene. There they fancy taking the partnership route, not just employing but empowering the right person by helping them start an office with a small capital injection and leaving them to make a success of the new operation, for their own account. “That’ll be real empowerment,” says Kabelo, “and if you empower people, you know they will help to grow your business – their business.”

A new initiative is online bookings, through the sakhumzi website, www.sakhumzi.com. Here the target is not just large corporate bookings but also occasional travellers needing to hire cars, among them entrepreneurs. “We want to be of service to these people - but just because we’re adding value doesn’t mean that we’re adding cost,” says Kabelo. “At Sakhumzi we have one rate and everyone can get that rate. Plus all of our value-added services. If you have a problem, 24/7, we’ll sort you out.”




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