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Jan 11, 2012

Toyota on top for 32nd year, but market share squeeze continues

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Despite the growing threat posed by German rival Volkswagen, Toyota has again clinched the number one spot in South Africa’s new vehicle market in 2011, with total sales of 109 413 vehicles and market share of 19.19% (including Lexus and Hino sales).

In 1990, Toyota had a 29% share of the local new vehicle market and, by 2000, 23%. Last year, the Japanese auto maker’s market share fell to 20.5%.

“We are especially proud of what we have achieved in 2011,” says Toyota South Africa Motors (TSAM) president and CEO Dr Johan van Zyl. “To maintain the market leadership position for the 32nd consecutive year against many more competitors and an ever-growing number of vehicle choices is significant, but it is even more impressive in light of the challenges that we have faced.”

These challenges were indeed numerous, and included the earthquake and tsunami that struck Japan in March. This chain of events severely constrained the supply of fully built-up vehicles to South Africa, as well as the flow of specialised parts and components required to maintain vehicle production at TSAM’s Durban plant.

The effects of the natural disasters in Japan were later followed, and in some ways compounded, by other major disruptions on the local and international front, says Van Zyl.

“We still vividly remember the unexpectedly high snowfall in July, which shut the main arteries between our plant in Durban and certain major suppliers and markets. This was followed soon after by a crippling strike in the component manufacturing industry in August, which again put unexpected strain on our own manufacturing activities.

“This tough year was topped by news of floods at our supply base, in Thailand, which again dried up the supply of parts and components to South Africa.”

Van Zyl summarises the year by saying that 2011 will be remembered as the year in which TSAM celebrated its 50th birthday in South Africa, but also “as one of our most trying and challenging years as a company”.

Apart from achieving the number one position in the local market, Toyota also produced the country’s best-selling model, at 37 874 Hilux pickups sold.

Looking at the year ahead, Van Zyl notes several developments on the local and international front that will influence vehicle sales and local production.

“On local soil we are eagerly awaiting the finalisation of the Automotive Production and Development Programme (APDP) that is set to replace [government’s] current Motor Industry Development Programme. Focusing on local production and efficiencies as opposed to export growth, the APDP will benefit further localisation of parts and components and support the development of a wider and deeper local component manufacturing industry,” he notes.

“Internationally we will keep a close watch on the development of key export markets, especially Europe. All indications are that markets in the eurozone remain fragile and growth, if at all, will be slow. As such this could influence our export volumes and will put pressure on us to grow exports to other markets, such as Africa,” says Van Zyl.

The developments above, as well as expectations of lower economic growth in the South African market, have lead Toyota to set an overall sales target of close to 2011's 570 000 units, implying that the market will stabilise at current levels or slow down somewhat.

Edited by: Creamer Media Reporter
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