Toyota South Africa Motors’ (TSAM’s) new R363-million parts distribution warehouse is the first big money spent in a fresh multibillion-rand investment cycle by the Japanese manufacturer, says TSAM president and CEO Dr Johan van Zyl.
“We will be looking at investing into the production of new models at the plant again, and expanding our business.”
TSAM currently assembles the Hilux, Fortuner and Corolla models at its Prospecton plant, in Durban, which has the capacity to produce 220 000 units a year. It also assembles the Quantum minibus in a new investment programme announced earlier this year and set to expand soon.
“We’ll be making announcements as the projects come to fruition,” says Van Zyl.
He adds that government’s new Automotive Production Development Programme (APDP), active from 2013, provides a stable backdrop for TSAM’s investments, but that political and economical stability also play a role.
Van Zyl notes that recent labour unrest at the Marikana platinum mine, in which 46 people died, has tarnished South Africa’s image abroad.
“We have to ensure that we manage this situation well, and that we do not create a negative environment for investors.”
He adds that Toyota remains positive about South Africa, and that it will continue its investment programme in the country.
Must Increase Local Content
While the APDP is a “good programme”, it is necessary to increase the local content in South African vehicles built for the local and export markets, says Van Zyl.
“When we review the APDP, we’ll have to look at how we can improve local content and how we can build in more benefits for components manufacturers.
“We’ll have to look at engines and gearboxes, which would, of course, require large investments. And we require these additional investments as the components sector is where the most jobs are created.”
Current local content on the Corolla is around 40%, and 60% on the Hilux.
Van Zyl says exports of these models from the Toyota plant are progressing steadily, with an improvement expected on last year’s numbers.
While debt-ridden Europe is proving a challenging market, Africa is growing steadily in its take-up from the Durban plant.
“Algeria will sell more than 400 000 vehicles this year,” notes Van Zyl.
“Africa’s middle class is starting to grow, and it is no longer only the State and semi-State institutions buying vehicles,” he adds.
TSAM’s new parts distribution centre was built and equipped in 15 months, and is designed to serve the company’s Southern African Toyota, Lexus and Hino dealer network with daily deliveries. It also supports 70 international destinations where South African-built Toyota vehicles are found.
The new facility has 39 000 m2 of storage space and a further 3 000 m2 of office space. This area hosts the company’s customer service and logistics support divisions.
In the second phase, Toyota will add a further 38 000 m2 of warehouse space, making this facility the largest of its kind on the African continent.
Until this second phase is completed – expected in 2015 – the new facility will be supported by the company’s existing warehouse infrastructure of 22 000 m2 located in Sandton.
The new warehouse carries 2.2-million pieces of 110 000 different parts and components, valued at more than R350-million. • There are currently 108 Japanese companies active in South Africa, creating 15 000 jobs.