Total new-vehicle sales in South Africa should reach at least 540 000 units this year, says Toyota South Africa Motors (TSAM) president and CEO Andrew Kirby.

“The breakdown for this year’s forecast includes 334 800 passenger models, 178 198 light commercial vehicles, as well as 27 002 medium and heavy vehicles.”

Kirby says TSAM’s forecast is based on a variety of socioeconomic factors that do not bode well for the local motor industry, including a rising interest rate cycle, the strain on the agriculture sector, owing to heavy rainfall, muted tourism recovery, as well as possible market instability on the back of the African National Congress’s leadership elections and the upcoming wage negotiations.

Bottom End

He adds that this forecast is at the bottom end of the potential market, and that the industry could sell more vehicles if the economy performs better than expected, or if issues in the automotive supply chain are resolved.

Kirby warns, however, that there is a real risk of price increases on new vehicles, owing to challenges in the supply chain, which are putting pressure on input costs.

These include a 400% jump in the dollar rate of a 40-ft shipping container, compared with the period prior to Covid-19.

TSAM sales and marketing senior VP Leon Theron notes Toyota will take clear aim at the new-energy vehicle (NEV) market as one of its primary focus areas this year.

NEVs includes hybrid, plug-in hybrid and battery electric vehicles (BEVs).

He says TSAM had a 50% market share in NEVs in South Africa in 2021.

He adds that the local arm of the Japanese carmaker is aiming for 40% of its passenger car sales to be NEVs by 2025.

“That is how aggressive we are going forward. We are a serious player in NEVs. Our roadmap is clear. It is hybrid, plug-in hybrid, and BEVs will follow. We need to be sensible about this.”

Theron says hybrids need to move into the domestic market first, owing to constraints on BEV adoption.

These include the current import duty regime, as well as the power supply problems experienced by State-owned power utility Eskom.

Kirby adds that South Africa will struggle to reach its renewable-energy generation targets.

For BEVs to reach their full potential in terms of environmental benefits, they cannot use electricity generated by coal-fired power stations.

That does not, however mean that South Africa should not “move ahead” and install charging infrastructure, or prepare itself in terms of the support, sales and servicing of BEVs, says Kirby.

“I think it is going to be a long timeframe for us and we need to be realistic about it. It doesn’t mean there aren’t big advantages to BEVs, but right now the real benefits and size of the market is small, until we address the problems around power supply.”

Kirby adds that the local automotive industry expects some clarity on government’s 2021 Green Paper on incentivising the local manufacture and purchase of NEVs by the end of this year.

“There is no concrete direction yet from the South African government. We expect it to be announced this year.

“It is a very important step for us to get those incentives in place.”

He says it is important to produce NEVs in South Africa and Africa.

“If we simply import all the new-tech vehicles, we’ll lose out on the industrialisation opportunities [introduced by NEVs].”

Kirby adds that people often tend to only think of batteries when considering BEVs, but that a lot of componentry will remain the same as in internal combustion engines, such as the traction motor, inverter, wiring harnesses and energy management system.