Roy Cokayne
Toyota South Africa Motors will launch 30 new models this year and aims to increase its overall domestic market share to 20.8 percent from 19.5 percent last year despite anticipating a decline in the total new vehicle market.
Calvyn Hamman, the senior vice-president of sales and marketing, said Toyota SA expected the total new vehicle market to decline to closer to 640 000 units this year, or less, from 651 000 units last year.
The National Association of Automobile Manufacturers of SA has forecast total sales of new vehicles of 652 000 units this year.
But Hamman said last week at the launch of the new Corolla that there were many negatives in the market.
He referred to the forecast of only 1.64 percent gross domestic product growth for this year, adding that consumer confidence was not strong and had “reacted negatively” to the recent 0.5 percentage point increase in the repo rate by the Reserve Bank.
Economists were forecasting further interest rate increases of between 1.5 and 2.5 percentage points this year.
“This will definitely have an impact on vehicle sales,” Hamman said, adding that the negative trends because of the rand exchange rate and other pressures would mean vehicle prices would have to rise.
But he said the new Corolla was the most important launch in many years by Toyota SA and it was an important vehicle in its line-up to grow its market share and secure 35 years of continuous South African market leadership.
Toyota SA recently lost its leading passenger car market position to Volkswagen South Africa. However, it has since launched the Etios to provide it with a model in the competitive entry-level segment and now the new Corolla.
Johan van Zyl, the president and chief executive, admitted Toyota was focusing more on the passenger car segment after struggling for a few years because it did not have an entry-level vehicle. But he stressed Toyota SA was not chasing passenger car leadership at all costs. It was about doing the right things in terms of giving customers excellent service.
Van Zyl said the R1 billion investment at its manufacturing plant in Prospecton, Durban, in new facilities, equipment and tooling was a strong signal of its intention to remain firmly rooted in the country.
Van Zyl said the investment was to ensure that the 11th version of the Corolla filled the shoes left by its predecessor. He said it was hard to believe it was a mere two generations of Corolla since Toyota SA was an inward focused motor manufacturer in Durban that built cars for the local market.
“Since then, first under the successful Motor Industry Development Programme and now the Automotive Production and Development Programme (APDP), we have evolved into a supplier of left- and right-hand drive Corolla, Hilux and Fortuner models to more than 58 export countries in Africa, the Caribbean and Europe, even Russia.”
Toyota’s plant has an annual capacity of 220 000 units and it anticipates producing about 175 000 units this year.
Van Zyl said it was important to use the APDP to full effect because by doing so it would be supporting the local supplier base. “Toyota has always had the view that without a strong local supply base there was no meaning to assembling vehicles in South Africa. We can create jobs and stable employment and through that make a meaningful contribution to society.”
Van Zyl said Toyota SA had been able to secure the R1bn investment in the new Corolla because there was an established market in South Africa. Having produced the previous generation Corolla it had the opportunity to carry over some of the components, which made it more palatable to do the investment. The APDP helped as well.
He said the country had been earmarked by Japanese parent Toyota Motor as a C-platform manufacturer. It had done well with the previous generation model and could produce it up to European export quality standards.