Toyota SA last week hosted its second imported parts exhibition at its head office in Durban, an event aimed at deepening localisation through the reduction of imported content. Photo: AP

PRETORIA - Toyota South Africa Motors (TSAM) is driving an initiative to deepen localisation in the auto industry while at the same time promoting transformation and the development of black suppliers.
The vehicle manufacturer last week hosted its second imported parts exhibition this year at its head office in Durban.

It was aimed at deepening localisation through the reduction of the imported content within the components it procures from its first-tier suppliers.

Kim Nisbet, the senior manager enterprise and supplier development at TSAM, said the deeper localisation opportunity needed to be used as a catalyst for development of small businesses.

Nisbet said TSAM therefore invited small black businesses that had the capability, after some development, to manufacture parts at a tier-two and tier-three level.

“We are looking to the tier-one suppliers to identify suitable suppliers for their imported parts and then lead this supplier development,” she said.

Volkswagen South Africa (VWSA) also has an initiative to identify and develop black-owned suppliers. It resulted in five suppliers being awarded a supply contract in November last year that would become effective once they had successfully completed an 18-month training and mentorship programme.

The new plan to replace the Automotive Production and Development Programme (APDP) from 2020 has not yet been announced but reportedly aims between 2020 and 2035 to, among other things, transform the sector, double its employment and grow local content levels from between 35 percent and 40 percent now to 60 percent.

Innovative

Renai Moothilal, the executive director of the National Association of Automobile Component and Allied Manufacturers (Naacam), said with local value-add levels rising post-2020 and linking this to transformation opportunities, it was crucial for South African original equipment manufacturers (OEMs) and large tier-one suppliers to find sources for localisation.

Moothilal said Toyota’s increased focus on and innovative, practical approach to localisation was a great example to others on how to drive deep localisation through the value chain.

Michael Waldburger, the general manager of purchasing at TSAM, said Toyota had embarked on multiple programmes to support the objectives of the new plan.

Waldburger said the imported parts exhibitions formed one of these programmes, with the first held in June this year, that were focused on wider localisation and reducing Toyota’s direct imports. “We displayed 800 parts and received 1400 expressions of interest so are positive about the potential of this parts display methodology.

“A second programme is our partnership with first-tier suppliers, who we have challenged to support the development of a black-owned supplier in 2018. This is already showing positive results,” he said.

Theo Govender, a senior purchasing manager at TSAM, said more than 30 Toyota first-tier suppliers last week exhibited 600 parts they currently imported or that had significant imported content.

“We worked with suppliers to identify parts we jointly believe could be produced locally, at globally competitive prices,” he said.

Nonceba Biyela, the enterprise and supplier development manager at TSAM, said more than 40 black-owned small businesses attended and would have an opportunity to bid for parts to potentially supply to Toyota in the future.

Shilpa Mehta, the managing director of Durban-based Production Logix, said smaller firms could not afford to chase dead-ends and the exhibition allowed suppliers to view parts and determine whether or not they had the necessary capabilities before embarking on the quoting process.

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- BUSINESS REPORT