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High-flying Van Zyl on education, manufacturing and driving a minibus taxi

24th April 2015

By: Irma Venter

Creamer Media Senior Deputy Editor

  

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Last year, Toyota South Africa Motors (TSAM) boss Dr Johan van Zyl swapped his Sandton office for another high-pressure environment as he took to Johannesburg’s streets as a minibus taxi driver, even if only for a day.

The aim of the exercise was “to really understand one of our customer bases, and truly experience the challenges faced by all the stakeholders, from taxi associations to drivers and passengers”, he explains.

The pressure was on, from the taxi owner to the passengers, demanding quick turnaround times and efficiency.

“The passengers would tell you to hurry up, because they are late for work.”

Toyota sells the locally assembled Quantum minibus to the taxi market. It has been the market leader in this segment for countless years – even before Hi-Aces earned the nickname Zola Budds.

“This was a true Genchi Genbutsu (go and see for yourself) learning experience where I forced myself to do something that is completely outside my frame of reference and something I never imagined I would do,” says Van Zyl.

“By putting myself into the shoes of South African taxi drivers, I learnt a lot about their daily struggles and challenges. The experience helped me think about how Toyota could improve their lives.”

The 57-year-old’s vocabulary has, over the years, become increasingly populated with Japanese terms.

After matriculating at Hugenote Boys High, in Springs, Gauteng, Van Zyl completed a doctorate in commerce, and earned the title ‘professor’ while lecturing at the then University of Potchefstroom.

In 1993, Brand Pretorius, then MD of Toyota South Africa Marketing, recruited him to join Toyota, where he was responsible for all sales activities, as well as the company’s dealer network.

In 1998, he became the president and COO of TSAM.

As the local company moved from the hands of its founders, the Wessels family, to become a wholly owned member of the Japanese Toyota Motor Corporation – and one more focused on volume production and exports – Van Zyl’s career also evolved.

In 2009, he was appointed a managing officer of Toyota Motor Corporation, in Japan, and, in 2013, he added ‘CEO for Toyota in Africa’ to his responsibilities.

On April 1, he started a new, yet again, expanded job. Added to his existing portfolio as CEO of South Africa and Africa, he is now also CEO of Toyota Motors Europe.

“I am responsible for all Toyota’s product development, its design centre and manufacturing and marketing activities in the European and African regions,” says Van Zyl.

The combined sales of Toyota vehicles in the area under this management are around one- million vehicles, and the yearly production output is about 700 000 units.

How has Toyota, often described as highly conservative, changed in the 22 years since Van Zyl joined the company?

“Globally, Toyota’s leadership has changed quite significantly. With the recent promotions announced, a woman – Julie Hamp – was appointed a new managing officer, with responsibility mainly around communication and public affairs, while Didier Leroy is the first non-Japanese executive vice president,” notes Van Zyl.

“These appointments are designed to foster innovation and diversity in the global management structures. Broader responsibilities awarded to vice presidents and managing officers have certainly enabled prompter decision-making.”

Toyota is facing a strong challenge from German rival Volkswagen for its number one global sales ranking, which Toyota took from General Motors in 2012.

Professional services firm KPMG expects Volkswagen to overtake Toyota in 2016. However, this is unlikely to happen in the South African market.

Staying on Top
Toyota ended 2014 as the number one vehicle brand in South Africa – yet again.

How has TSAM managed to retain pole position for 35 years in a row? And how does it plan to stay on top in a market that will most likely be flat in 2015, as South Africa’s economic growth falters?

“I am often asked this question and the answer is quite simple: we offer high-quality products for a varied customer base and we offer exceptional customer service,” says Van Zyl.

“Keeping the customer happy is the cornerstone of Toyota’s success – happy customers, I would say, are the secret to our success. The cutting edge of our business is the dealer network. They are the people that really deliver the service our customers deserve.

“Toyota has also always delivered on the core values of quality, durability and reliability. That is what the brand represents. We have also added Waku Doki (excitement) to the brand, with cars like the 86, during the last few years. Toyota vehicles also retain their resale value and customers place a premium on this.”

Taking the number one position for 35 years in a row, however, also means that the company has survived the launch of the digital age, the spread of social media, and the dawn of democracy in South Africa.

In short, the domestic environment and the people inhabiting it have changed dramatically over the last few years. How does a car company reach a new-look generation that uses different, new platforms to communicate, shop and vent their emotions?

The way customers make purchase decisions and shop has indeed “changed dramatically” over the past few decades, and companies are forced to keep up with the trends, says Van Zyl.

“Customers are informed buyers and they expect to get information regarding your products and services from the Internet.

“While Toyota still supports traditional advertising and marketing platforms, it is important to grow our customer base and our social media footprint. Our marketing teams are constantly innovating the way our products are presented to the customer and, through thorough research, we ensure that we talk in the right manner to all of our customer segments.”
South Africa’s buying power has also become increasingly multiracial. This, however, is not such a big challenge.
“I believe a customer – irrespective of cultural background – wants two things: a good value-for-money product and a positive customer experience,” says Van Zyl.

“Also, I do believe South African dealerships have transformed, but, as our core value of Kaizen (or continuous improvement) would have it, there is always more to be done to improve and ensure that we make all customers feel like guests in our dealerships, fostering a relationship of trust and respect.”

Looking ahead to the next five to ten years, Toyota aims to retain its market leadership, locally and globally, and to continue producing “high-quality and safe products”, says Van Zyl.

“On the research and development front, the quest for sustainable mobility remains an important focus. We have just launched the Mirai, the world’s first hydrogen fuel cell vehicle, in Japan, and vehicle connectivity is becoming an opportunity.

“In Africa, affordability remains the biggest challenge, and we will keep on developing products such as the Corolla Quest to address this issue.”

The Corolla Quest is a less expensive, trimmed-down version of the new Corolla. Both are built at Toyota’s plant in Durban.

Labour, Labour, Labour
In an April 2005 interview with Engineering News, an upbeat Van Zyl indicated that TSAM sold more than 113 500 vehicles locally and exported about 11 000 Corollas in 2004.

The Prospecton plant, in Durban, produced nearly 113 000 vehicles.

By 2010, he said, the company hoped to sell 150 000 vehicles on the domestic market, manufacture 200 000 units and export 100 000 vehicles each year.

The market decided differently, however, with a global recession taking its toll here and abroad.

In 2010, TSAM produced 123 172 units, exporting 62 704 vehicles.

In 2014, the company produced 142 739 vehicles in Durban, exporting 64 789 units. Toyota also sold 127 534 vehicles in a sluggish domestic market, translating into a 19.8% market share.

In 2004, it had around 25% market share. It is likely that a proliferation of new models and brands, such as Hyundai, ate into Toyota’s slice of the pie.

Today TSAM produces the Corolla, the Fortuner, the Hilux, the Corolla Quest, the Hino truck range and the Quantum minibus at its KwaZulu-Natal facilities.

TSAM is currently readying the plant to produce the new-generation Hilux pick-up, with the bakkie set to enter the local market in the first quarter of next year. The new Hilux will be exported to Africa, Europe and Russia, as is the case with the current pick-up.

The Hilux was South Africa’s top-selling vehicle in 2014, at 37 561 units.

Manufacturing in South Africa is not always an easy task, says Van Zyl.
“South Africa is a country with enormous potential; however, our biggest challenge is our struggle to become globally competitive. High logistics costs and low productivity contribute to this problem.And, while we have improved our productivity, all these gains are lost when you have strikes as we have experienced over the last 24 months,” laments Van Zyl.

“It is impossible to be competitive in the global arena if you lose so much production time.

“Also, while our component supply base has improved its competitiveness over the last few years, we are still 15% to 20% more expensive than competing supply bases.”
Van Zyl says manufacturing is an important part of South Africa’s gross domestic product (GDP), and currently contributes between 13% and 15% of GDP. The motor industry contributes more than 7% of GDP.

However, manufacturing’s contribution to GDP has deteriorated over the last 15 years.

“We have deindustrialised due to a lack of competitiveness and intense global competition.

“Manufacturing transfers technology and creates jobs,” he adds.

“The Japanese economy is built on Monozukuri (the process of making or creating things). South Africa must industrialise and use its wealth of resources as a competitive advantage.”
Government has several policies and support programmes in place to encourage manufacturing, acknowledges Van Zyl.

“The Automotive Production and Development Programme is a good example. Its predecessor, the Motor Industry Development Progamme saved the South Africa motor industry from closing down.”

However, he notes: “We can definitely manufacture more goods in South Africa. The private sector must take the lead. The opportunities are there, but we need more entrepreneurs to grasp these opportunities.

“And I do believe the conversion of our resources and raw materials into products is the key to future job creation and prosperity,” he reiterates.
Assessing South Africa beyond its manufacturing context, Van Zyl believes the country offers “a lot of positives”.

“South Africans have a can-do attitude. We must not forget our democracy is very young. We must not hide or ignore the issues we face. We all know what they are – I do not want to repeat them.

“Our long-term sustainable solution is education and skills development. The human potential exists – we just need to develop it. We need to develop a mindset of continuous improvement.”

His advice to young South Africans entering the job market in 2015 is to always have a specific dream or goal in mind.

“Work hard and smart, and be patient. It’s not going to happen overnight and you need to persevere. If you want to start your own business, do it now, but make sure you have a solid business plan. Gain as much experience as possible and continue your education.”

He adds that mistakes are “great learning opportunities”.

Positive Influences
“Many people have had an influence on my life and career,” says Van Zyl.

“My parents provided me with a very strong set of values. I also had the bene- fit of excellent teachers – even if not all of them.

“The late Bert Wessels (former Toyota South Africa CEO) was a fantastic mentor and person, and it was a real privilege to work with Brand Pretorius. He is still a very good friend.

“Many Japanese colleagues also had an influence on my career. My wife, Santie [whom I met while at school] and my family have always played a major role in the career decisions I have made.”
In 2004, Van Zyl noted that he spent three days of his working week at the Durban plant. In his new position, he will, on a rotating basis, spend one week in Japan, one week in South Africa, and two weeks in Europe, where Toyota has eight manufacturing sites.

By now, he and Santie have probably completed their house-hunting in Brussels.

Not bad for a boykie from Springs.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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