The closure of any vehicle manufacturer’s operations in South Africa would be “a total disaster”, said Toyota South Africa Motors (TSAM) president and CEO Dr Johan van Zyl on Thursday.

He was also the president of the National Association of Automobile Manufacturers of South Africa (Naamsa).

Speaking at a media breakfast in Johannesburg, he said South Africa’s automotive manufacturing industry was “very much like” the industry in Australia, which was set to close down after 2017, owing to decreased government support, rising costs and shrinking volumes.

“We can’t lose anyone. If one [manufacturer] leaves it would have a domino effect.”

Van Zyl said it would be impossible to sustain the South African component supplier base, should vehicle production volumes deteriorate owing to the departure of any single manufacturer.

“Slowy, but surely, things will just die.”

While vehicle manufacturers do not use the same wiring harness, for example, the number of manufacturers present in South Africa ensured sufficient shared volume for a wiring harness producer to set up shop locally.

Van Zyl emphasised that the closure of any local plant would not see the remaining vehicle manufacturers gain market share, as had been hinted at by some market commentators.

Car and bakkie producers in South Africa included Toyota, Volkswagen, Mercedes-Benz, BMW, Ford, Nissan and General Motors.

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

NEW HILUX
TSAM would indeed produce the new generation Hilux pickup at its Durban plant, with the bakkie set to enter the local market in the first quarter of next year, confirmed Van Zyl on Thursday.

The new Hilux would be exported to Africa, Europe and Russia, as was the case with the current pickup.

TSAM’s Durban plant had the capacity to produce 220 000 vehicles a year, with around 120 000 units of this capacity allocated to the Hilux.

Van Zyl said this number could be ramped up for the new pickup model.

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

TSAM built 155 000 vehicles last year, excluding trucks.

The local arm of the Japanese group also exported around 70 000 vehicles, with the overwhelming majority of these Hilux bakkies.

A small number of Corollas are exported to Africa.

Van Zyl expected TSAM exports to decline to around 65 000 vehicles this year.

Africa would see a decline in vehicle take-up from TSAM owing to regulatory changes in Algeria, Nigeria and Angola, with lower oil prices also taking an economic toll on many African countries.

Sanctions would continue to mar Russia’s new vehicle demand.

Van Zyl expected the 2015 South African new-vehicle market to remain flat over that of 2014.

LABOUR DISCUSSIONS
South Africa’s automotive industry was set to return to the negotiating table next year, with the current three-year wage deal coming to an end in 2016.

Van Zyl said the last two years had seen 13 weeks of lost vehicle production owing to strikes, not only in the automotive industry, but also in related sectors.

“There is no way we can do that again. That was an incredibly bad period.”

He said Naamsa was already locked in talks with unions on how to approach next year’s negotiations in a more productive manner.

“If we can not change the process, we must at least change the mindset. We can be more cooperative and less disruptive – from both sides. Business and labour need each other.”

EUROPE CALLING
Toyota announced on Wednesday that Van Zyl’s portfolio had been expanded to include Toyota Europe.

He would remain president and CEO of TSAM (and Naamsa), but would also become president and CEO of Toyota Motors Europe.

"This is a fantastic career opportunity and I am very excited about this new challenge. However, I want to reiterate that my home will always be South Africa and I remain committed to the development of the industry in this country," said Van Zyl.

The 57-year-old would now, on a rotating basis, spend one week in Japan, one week in South Africa, and two weeks in Europe, with its eight manufacturing sites.

Van Zyl noted that TSAM had “competent management structures” to ensure that the local company was “not leaderless” when he travelled abroad.

“I have huge trust in the South African structures.”

Van Zyl would start in his new position on April 1.