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Load-shedding 'extremely dangerous' to local auto sector, warns Naamsa chairperson

TSAM president and CEO Andrew Kirby

TSAM president and CEO Andrew Kirby

19th February 2019

By: Irma Venter

Creamer Media Senior Deputy Editor

     

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Load-shedding is “extremely dangerous” to the local automotive industry, says Toyota South Africa Motors (TSAM) president and CEO Andrew Kirby.

Kirby is also president of the National Association of Automobile Manufacturers of South Africa.

Speaking at a TSAM media function, held in Johannesburg, on Tuesday, he said the local automotive industry ran production operations that did not “do well” with stop-start operations.

“Also, the financial impact of losing production hours is enormous, because you need to make up through overtime, and overtime is expensive.

“We are also not in a position to let our local or export customers down. We, as the South African industry, are working hard at maintaining a good reputation, especially as we try and secure future manufacturing investment.”

Kirby confirmed that load-shedding had had an impact on production at TSAM’s Durban plant last week.

“We are working closely with the City of Durban, and they have been understanding. We have been asked to reduce our daily consumption pattern by 20% and we have been making a big effort to do that.

“So far we have been able to avert any production stoppage. So we haven’t lost any volumes, but if you walk into our plant, the lights are off and air-conditioning is off and some lines have stopped.”

TSAM is currently working hard to secure a successor contract to the Corolla, with the Durban plant to halt production of the popular sedan when the new model is launched locally in 2020.

This will leave the plant with the production of the Hilux, Fortuner and HiAce Ses’fikile minibus models.

“We are trying to get approval for a replacement vehicle,” noted Kirby. “The key issue is to demonstrate that we are globally competitive and that we can achieve the required volumes to make the product viable.

“Right now the South African market is under pressure and we don’t have another market in Africa that is generating volume. So this has been quite a difficult process for us. We hope to have an answer on the new model by 2020.”

BLACK COMPONENT MAKERS
TSAM is busy with a three-phase localisation project that started at the end of 2017.

The company aims to localise 285 imported parts on its locally assembled vehicles, valued at R622-million a year.

This process also creates an opportunity for increased participation by black-owned businesses.

Transformation remained a key issue to address within the local automotive industry, said Kirby.

“Last year TSAM added five black-owned parts suppliers to our network. This year we are targeting ten companies.”

On the dealer side TSAM planned to open a number of parts and service operations in rural areas where there were “a lot of informal automotive business, especially around Toyota”, said Kirby.

These parts and service operations will be 51% black-owned, and will partner with existing Toyota dealers. The established dealers will provide technical skills and leadership support to the newly established black-owned businesses.

“Over time we would like these businesses to buy back into the dealers,” noted Kirby.

“Last year we added 13 black-owned dealers to our network – not only parts and service operations. We are targeting another ten in the next two years.”

Edited by Creamer Media Reporter

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