SA car leader invests another R4 billion too
It is exceedingly refreshing in these times of darkness and economic gloom, to spend some time with someone genuinely positive about fixing our ailing nation. Never mind backing that confidence up by signing off on over R4-billion in investment in the country over the next two years.
Car Sales Down
Speaking at the company’s annual State of the Motor Industry summit, Toyota South Africa President and CEO Andrew Kirby conceded that total vehicle South African sales for the year 2020 will continue on the downward trajectory that began in 2013 and should settle at a total of 515 000 units sold across the board come the end of the year.
Of that, Kirby estimates that 339900 will be passenger cars and 150585 will be bakkies and LCVs, with the balance made up of 7880 medium and 16635 heavy commercial vehicles.
In spite of all that, Toyota continues to invest heavily in its Prospecton, Durban production plant with R2.4-billion earmarked to gear up for the manufacture of an all-new passenger model that will replace Corolla production alongside the new Quest, for both local and international distribution.
“Let’s not fool ourselves, things are bad,” Kirby admits, referring to the catastrophic failures of both State Owned Enterprises the likes of Eskom and SAA and local municipalities. “Maybe it is something we as a country needed -- perhaps getting to absolute rock bottom is the incentive to rise up and fix or repair those failures.
Fully confident in SA
“I am confident South Africa can do it and we, as Toyota, are backing that.”
Ettienne le Roux, Chief Economist at Rand Merchant Bank added: “Over the past two or three years, consumer confidence has been low and spending quite conservative. “This will of course affect local vehicle sales because buying a car is considered to be discretionary spending, while finances are really tight and the pressure consumers are feeling is quite significant...”
Independent economist Dr Thabi Leoka, who also sits on President Cyril Ramaphosa’s Economic Advisory Panel, pulled no punches on the current South African socio-political landscape: “Our house is dirty, yet we go out into the world to invite investors to come and eat in this house of chaos?” she pointed out. “We need to focus on cleaning our house first.”
Yet in spite of all this, Toyota SA remains cautiously optimistic on achieving a competitive market share come the end of the year. “Our strategy involves galvanising Toyota’s wide dealer channel,” Leon Theron, Toyota SA Sales and Marketing chief explained. “We will also continue enhancing the Lexus and Toyota hybrid offering as well as a robust marketing approach around the Corolla nameplate.”
New Made in SA Model
Toyota confirming its R2,4-billion in that new passenger car is not its only investment in South Africa – other substantial funding includes R540-million towards Hiace Ses’fikile enhancements and a production volume increase from 14 000 to 18 000 units a year that will result in a further 270 new jobs, as well as R20-million toward the establishment of a packing plant to support Hilux knock down business in Kenya.
Add further investment of almost a billion rand for among others, doubling the size of Toyota’s Atlas Warehouse to 80 000m² making it the largest auto parts store in the Southern Hemisphere, plus a number of ongoing projects including investment into the new Corolla Quest and other facility upgrades at the plant.
It will also be a busy Toyota year on the product front with the arrival of the Lexus UX250 and LC500 Convertible this month, the all-new imported Corolla coming in March, the CH-R facelift in April and the Fortuner Epic derivative, before Android Auto and Apple Car Play arrives in all Toyota models across the board too and that’s just for the first half of the year.
What will it be?
The identity of the new nameplate however remains a closely-guarded secret, but speculation is indeed running wild as to what it will be. Auto hazards a guess that it will be the Oriental-marker Axio – a slightly downsized version of the Corolla. Corolla sedan is however itself confirmed for SA in March alongside both Quest and the sedan, so why bring a third variant here, so a new SA-built version of the Indian sourced Etios is a likelihood.
There is however a dark outsider that we really like in the new Euros-pec Yaris. Toyota SA has been tickling the social media with the sensational hot new Yaris GR, which is a very different car to the current local Yaris that has Eastern roots. Building the more sophisticated new Euro sec car here would make the GR version a certain starter in SA – would than not just be a treat. Whtever it is, the new Toyota will be solid as houses.
Most importantly however, Toyota remains fully committed to South Africa, warts and all. “Our long-term commitment is to local manufacturing and the South African automotive industry,” Andrew Kirby concluded. “This latest investment will generate an additional R2,85 billion towards the South African economy a year and add approximately 1 500 new jobs.
“It is of particular importance to note this investment would not have been possible without industrial policy certainty in the form of APDP-2, and I would like to thank all role-players involved in paving the way to practical implementation of the new policy regime in 2021.” – Colin Windell