Toyota boosts investment in South African taxi plant to more than US$65m

SOUTH AFRICA – Toyota South Africa Motors (TSAM) announced that it has boosted its investment in its HiAce Ses’fikile taxi vehicle plant in Prospecton near Durban to more than US$65m (R1 billion) since 2012.

According to The Citizen South, the manufacturer has also invested almost US$1.32m (R20 million) in a packing plant to support the commencement later this month of its export operations and local assembly of its Hilux model in Kenya.

Andrew Kirby, president and chief executive of TSAM, says the enhancements to local production of the HiAce Ses’fikile model have created an additional 80 jobs in the plant while 20 additional people have been employed because of the investment in the packing operation.

Kirby says TSAM is committed to supporting the South African Automotive Masterplan and has proactively increased the local value addition of the HiAce Ses’fikile to 44% from 38%, with this localisation adding US$27.8m (R422 million) a year in local value addition to the economy.

The automotive industry and government agreed on the masterplan last year. In terms of the plan, it is envisaged that employment in the automotive manufacturing industry will double to about 240 000 by 2035, with vehicle production increasing from 600 000 to almost 1.4 million units that year, and local content rising from 39% to 60%.

Kirby says the latest investment by TSAM in the HiAce plant followed its initial investment in 2012, adding that it switched from importing the HiAce as a completely built-up unit (CBU) to a semi knocked-down (SKD) vehicle at that point, and to a completely knocked-down (CKD) model in 2015.

“Since the introduction of the local manufacture of this product, we have seen volumes increase from 9 300 to 14 000 units per year, which equates to an increase of 37%.”

He adds: “The most recent increase in demand from our customers to 15 000 units per annum has given us this opportunity to deepen our localisation, which will allow us to improve affordability over time.

“The minibus taxi industry plays a pivotal role within the South African transport system, and as such, is important in supporting the wheels of our economy.”

In terms of market share, TSAM has about 80% of the taxi vehicle market, with the taxi industry transporting more than 15 million or about 70% of the commuting public daily.

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