The South African new-vehicle market should end the year at an estimated 570 000 units, says Toyota South Africa Motors (TSAM) president and CEO Dr Johan van Zyl.

This will be a 15% increase on the 492 956 new cars, bakkies, buses and trucks sold in South Africa last year.

“This is far from the 714 000 new vehicles sold at the peak of the market in 2006, before the recession, but this growth trend is encouraging,” says Van Zyl.

The bad news is that the Toyota boss expects the 2012 market to remain flat compared with 2011.

“Of course, we hope the growth trend will continue, but there are some negative trends emerging. These include the growing European debt crisis, which could potentially have a big impact on South Africa as the European Union remains one of the country’s top trading partners.”

The European crisis also means that vehicle exporters, such as Toyota, should expect a decline in demand for their products.

Van Zyl expects the European new-vehicle market to reach around 12-million units in 2012 – a far cry from the 18-million units achieved in 2007.

“This is a dramatic decline. Luckily, the contraction in our other export market, Africa, is expected to be less stark. However, a depressed European market will definitely have an impact on us, but it is hard to quantify exactly what that impact would be.

“It is, however, also possible – and we think this could be the case – that there will not be another major global recession.”

Van Zyl adds that the rand:dollar, rand:euro exchange rates remain “extremely volatile”, with the yen also strong against the dollar, rendering imports from Japan more expensive.

“It seems pretty clear that vehicle prices will have to increase – probably in the new year. The rand earlier this month reached its lowest point against the dollar in two years.”

Van Zyl also notes that rising inflation could spell an increase in interest rates, scaring off new-vehicle buyers, even though this may only happen in late-2012.

Any impact from a pressurised European market, and a subsequent tough macroeconomic environment, will follow on a challenging 2011 for TSAM, with the local arm of the Japanese manufacturer long battling the effects of the early-2011 earthquake and tsunami in Japan. This natural disaster disrupted component supply chains across the globe for months.

“We had a bad April, May, June and July,” says Van Zyl, “but things have improved sig- nificantly since then.”

That said, though, the newest challenge comes in the form of a flooded Thailand, the source of many bakkie parts for car plants, including Toyota’s South African plant.

TSAM expects to produce around 155 000 vehicles at its Durban plant in 2011, down from 127 000 units in 2010, despite the Japanese disaster.

“It is a bit early to say, but we expect to have a normal production and sales year in 2012,” says Van Zyl.

Much of the CEO’s confidence comes on the back of a refreshed Hilux and Fortuner line-up, with the Hilux still South Africa’s top-selling vehicle. However, it can also be attributed to TSAM’s ability to finally, again, make a value- for-money offer to consumers following the demise of the Tazz.

Van Zyl says the small-car segments – A, sub-B and B – are set to continue their growth path as consumers seek more bang for their buck.

“These segments now make up around 50% of the new-car market.”

Van Zyl is positive the new budget Toyota Etios, to be launched in the second quarter of next year, will be able to satisfy consumers’ needs in these value-conscious segments, adding to the Yaris and the Aygo already on offer.

Apart from “one or two surprises” for Toyota fans, Van Zyl says TSAM will also unveil the FT-86 sports cars locally in 2012, as well as its third hybrid, with the Yaris hybrid the newest addition to the alternative-drive family.

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