https://www.engineeringnews.co.za

Toyota SA to see production, exports dip, recovery expected in 2017

TSAM's Prospecton plant, in Durban

TSAM's Prospecton plant, in Durban

18th May 2016

By: Irma Venter

Creamer Media Senior Deputy Editor

  

Font size: - +

Toyota South Africa Motors (TSAM) will see production at its Durban plant drop from 138 000 units in 2015 to an expected 122 000 units this year, says TSAM president and CEO Andrew Kirby.

Of the 138 000 units assembled at the Prospecton plant last year, 93 500 units were Hilux bakkies, 10 200 units Fortuner sports-utility vehicles, 26 000 units Corolla sedans and 8 600 units Quantum minibuses.

Despite having a new Hilux and Fortuner in the model line-up – both launched a few weeks ago – production volumes are expected to decline this year as the production ramp-up of both these models will only be completed in the middle of the year, notes Kirby.

With the Hilux TSAM’s major export product, exports from the Durban plant are also expected to take a knock this year, he adds. Export volumes should reach around 52 000 units, down from around 60 000 units in 2015.

Kirby is optimistic, however, that production and export volumes will meet or exceed 2015 levels by 2017.

Hilux exports to Europe and Africa have already started.

Exports and production at TSAM have been in steady decline since 2012 and 2013, respectively, this despite the 2013 introduction of government’s new support programme, the Automotive Production and Development Programme, which has been lauded by a number of local vehicle manufacturers – TSAM included – as a policy instrument efficient in boosting production and export volumes.

TSAM production peaked at around 185 000 units in 2008, with exports reaching 128 000 units during the same year.

Kirby says the decline has not been by choice.

TSAM started Corolla exports to Australia in 2002, followed by Hilux and Fortuner exports to Europe and Africa in 2005, and Corolla exports to Europe in 2008.

However, TSAM lost the Australian export market, with Corolla exports to Europe also ceased, owing largely to competitive pressures from within the Japanese group.

Today TSAM exports the Fortuner, Hilux and Corolla to Africa, with the Hilux also going to Europe. The Quantum is produced exclusively for the local market.

Production volumes at Prospecton have also been hit by the economic downturn in Africa, fuelled by a steep decline in demand for commodities, which has directly affected the continent’s appetite for new vehicles, notes Kirby.

Regulation changes stripping support for new imported vehicle purchases in a number of countries exacerbated the situation, he adds.

With total export volumes to reach around 52 000 units this year, it is worth considering that TSAM exports into Africa alone peaked at around 60 000 units in 2008.

Kirby believes, however, that Africa still holds “lots of potential”, with TSAM focused on being “a key vehicle producer” on the continent.

Africa has a low level of motorisation, and a growing middle class – ingredients which spell a growing demand for vehicle ownership.

“The question is how long it will take for the market to pick up,” says Kirby.

“I think we have hit the bottom of the cycle.

“Of course we are a bit disappointed that the African market is not stronger, but we expect strong gains over the next three to four years.”

Is Toyota looking at establishing an assembly plant in Nigeria, as Nissan and Ford have done?

“We are looking at the possibility, yes, but Nigeria must finalise its automotive policies first.”

CAPACITY AVAILABLE
The TSAM plant is a roughly 210 000-unit capacity facility, with a large part of this capacity built for Corolla exports to Europe.

Kirby expects TSAM to reach production capacity on the Hilux and Fortuner lines in 2017. However, Corolla production is likely to continue falling short of initial expectations.

“But, we are looking at growing our local manufacturing and supplier footprint, as well as our production volumes,” he emphasises.

Doing this is, in fact, one of his medium-term goals as newly appointed TSAM CEO and president.

Key to growing TSAM’s manufacturing footprint is improving the company’s global competitiveness, notes Kirby. This will allow the company to be a stronger competitor within Toyota’s network when “future investment opportunities” arise.

Kirby also aims to strengthen “the relevance of Toyota in South Africa”, with a specific focus on improving the customer experience at “every touch point”.

TSAM has always had a strong focus on skills and leadership development within the company, as well as at dealership level and within the supply chain, he adds.

“I would like to strengthen the depth and breadth of this development programme.”

In general, TSAM would like to continue to make a positive contribution to the country, says Kirby.

“We want to continue to support the industrialisation of South Africa.”

Kirby’s shorter term goals include bedding down the introduction of the new Fortuner and Hilux models in South Africa, and facilitating the successful export of these models into markets abroad.

He also has to ensure that TSAM retains its position as market leader in South Africa’s new vehicle market, in a struggling domestic economy impacted by continued currency fluctuations.

 

Edited by Creamer Media Reporter

Comments

Showroom

Weir Minerals Africa and Middle East
Weir Minerals Africa and Middle East

Weir Minerals Europe, Middle East and Africa is a global supplier of excellent minerals solutions, including pumps, valves, hydrocyclones,...

VISIT SHOWROOM 
Rentech
Rentech

Rentech provides renewable energy products and services to the local and selected African markets. Supplying inverters, lithium and lead-acid...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.103 0.157s - 158pq - 2rq
Subscribe Now