Toyota South Africa Motors president and CEO Dr Andrew Kirby. Photo: Supplied
At its annual State of the Motor Industry address held in Johannesburg on Friday 31 January, Toyota South Africa Motors (TSAM) broke the news of a substantial investment into the market.
The announcement that will see R4.28 billion injected into the economy, is centred around increased operational capacity, production line enhancements, as well as new manufacturing facilities for an all-new model that will replace the Toyota Corolla production line.
Toyota Hiace gets R541m
A total of R541 million has been budgeted to enhance the production facilities for the Toyota Hiace minibus taxi, most commonly used to transport millions of people to and fro every day.
In addition to the investment in the facilities, the funds will be used to increase production capacity from 14 000 units per annum to 18 000 units.
R365m to increased parts warehouse
Access to parts is a hugely important part of the logistics channel and Toyota aims to improve this by doubling the capacity of its parts warehouse in Johannesburg.
Due to be completed in 2021, the 80 000m² warehouse is reported to become the largest parts warehouse in the region.
R2.43bn towards all-new locally produced model
The biggest investment is set to go towards the production of an entirely new passenger car model at the manufacturing plant in Prospecton just outside Durban.
Currently, the particular plant continues to manufacture the Toyota Corolla, but production will be halted at the end of 2020.
The new model is yet to be announced, but part of the manufacturing facility will include production of the first hybrid drivetrain ever produced on local soil.
Other investments include a new packing facility, as well as significant upgrades to the Corolla Quest production, now to be re-introduced to the market as the outgoing 11th-generation Corolla.
This announcement by TSAM comes in the wake of continued market decline for the automotive segment with TSAM president and CEO Dr Andrew Kirby himself stating his expectations of even less total sales for the industry in 2020.
His sentiments were echoed by Rand Merchant Bank (RMB) chief economist Ettienne le Roux, who also suggested a 0.6% GDP growth in 2020.
Local investment the driving force
Toyota’s commitment is testament to its belief in both the sector and the country. Indeed, the company enjoys the largest market share dominating sales in South Africa for the past four decades and already heavily invested into the local economy.
This new investment announcement is set to add another 1 500 jobs to the sector, not to mention the additional spin-off business across industries.
This announcement follows that of Ford in November 2019 to work with government to establish the Tshwane Automotive Special Economic Zone, another significant investment that is reported to create more thaan 5 000 new jobs when it is established.
