Toyota SA 'a global producer'
5 March 2008
Toyota South Africa will export over 140 000 vehicles from its Prospecton plant near Durban to over 40 global destinations this year, following a multi-billion rand upgrade that has turned the company from a local supplier to an international export base, as well as Africa's biggest vehicle manufacturer.
In a statement issued this week, Toyota SA says it started the upgrade programme together with its Japanese parent, the Toyota Motor Corporation (TMC), in 2002 to increase the local plant's production volume from 100 000 units per year. TMC owns 75% of Toyota SA.
"This historic occasion aligns Toyota South Africa closely with a number of other Toyota global production facilities, each with annual manufacturing capacity of 200 000 to 250 000 vehicles," Toyota SA CEO Johan van Zyl said at a function this week to mark the start of Corolla sedan exports from the Prospecton plant.
He said that Toyota SA expected to export 147 000 Hilux and Corolla vehicles to more than 40 global destinations in 2008, accounting for close on 60% of South Africa's estimated total vehicle exports, of over 250 000 units, for the year.
The project is expected to create up to 4 000 new job opportunities, while close to half of the total investment has been spent on local suppliers with established black economic empowerment credentials.
According to the company, the local value added across the Hilux and Corolla models is more than 60%, and together with components exports are expected to push the value of Toyota SA's exports for the year to nearly R20-billion - close to 1% of the country's gross domestic product (GDP).
"This [high local content used] makes both of these models compliant with the requirements of the European Free Trade Agreement with South Africa and thus eligible for importation into Europe free of duty," Van Zyl said. "Toyota is the first South African vehicle manufacturer to achieve this."
Investment, skills development
Following the five-year, R2.4-billion plant modernisation programme, Prospecton now features the latest in automotive manufacturing technologies. South Africa is just the third country to make use of a patented stamping technology, while the paint plant features technology that is being used outside of Japan for the first time.
According to Van Zyl, the transition of his company to a global export base started with the export of around 10 000 Corolla sedans to Australia per year, followed by a decision by Toyota Motor Corporation to turn SA into a global manufacturing hub for the new Hilux, for sale in Europe and the rest of Africa.
"The third phase came with the announcement by TMC that the new Corolla sedan would join the Hilux as a volume export model from South Africa to European and African destinations. Both models are produced in right- and left-hand drive variants," he said.
"This required a total transformation in the way we do business and in the way we build vehicles. Fundamental to this process was a multi-billion rand investment in new facilities and technologies that overshadowed anything that the local industry had seen before."
Van Zyl said the company's transition into a global player had been accompanied by an investment of R300-millioin over the five years in training its workforce, which included sending 174 employees to Japan for training in the "Toyota Way".
In addition, he said, the programme had encouraged 12 new international suppliers to invest in South Africa. Eight of the companies are from Japan and four from Europe, with nine having invested in their own right and three others being joint ventures with local companies.
"Toyota South Africa is now firmly established as the largest vehicle manufacturer on the African continent and as the largest vehicle exporter in South Africa," Van Zyl said.