Toyota raises red flags over its KZN business following riots

File picture: Aly Song

File picture: Aly Song

Published Jul 19, 2021


Durban - Japanese auto manufacturing giant Toyota has raised grave concerns over the business environment in KwaZulu-Natal, following the incidents of wide-scale vandalism, destruction of property and looting.

In a letter written by Toshimitsu Imai, Toyota’s regional officer for Africa, to eThekwini Mayor Mxolisi Kaunda the auto manufacturer said the riots which rocked the province left it thinking twice about further investments.

“A key priority for Toyota is the safety and welfare of our employees, their families and the communities within which we operate. The safety and harmony within this ecosystem is a fundamental value we strive for because it enables us to be a successful business and thereby contribute to the communities and economies within which we can operate,” said Imai.

“Unfortunately, the incidents in the city have left us feeling very uncertain about the future of our business in KZN. Our manufacturing operations in the south of Durban were forced to close and have remained closed since Monday, 12 July 2021. We are uncertain as to when it will be safe enough for us to resume operations.”

Imai said the current closure of Toyota South Africa’s (TSAM) manufacturing operations “jeopardizes” the company’s future sustainability as it embarked on a recovery mission following the raging Covid-19 pandemic.

“Export volumes into Europe have started increasing as their economy recovers. The loss of production over the past week means that TSAM will more than likely lose some of this business to one of our global Toyota affiliates because our European customers will not wait for their orders,” said the Toyota boss.

“Build up vehicles destined for exports market also cannot be shipped due to the closure of the port. The closure of the N3 [freeway] to Gauteng means that TSAM will be unable to deliver vehicles to customers in Gauteng. Thus, we expect TSAM sale to drop by as much as 10 percent in July.”

Toyota South Africa is in the final stretch of preparations to launch its first locally produced “new energy vehicle” later this year.

“However, given the uncertaintly around the current unrest, they risk missing ket deadlines and the opportunity to challenge for other new products,” said Imai.

He said while the local Toyota management team has been working closely with the leadership of eThekwini, “they [the local government] are unable to provide us with clear direction/plans on how the city intends bringing stability and order back to the city,” said Imai.

He said the timing of the unrest was “very unfortunate”.

Last week, the Durban Chamber of Commerce warned that the ongoing violent protests which took place across KwaZulu-Natal province and parts of Gauteng may lead to a shortage of food and other supplies, echoing President Cyril Ramaphosa.

In a national address last week, on the violence which started off as protests against former president Jacob Zuma’s jailing for contempt of court, Ramaphosa said the country could face food and medicine shortages as a result of disruptions to supply chains and industries across the two provinces.

Reiterating this, the Durban Chamber of Commerce and Industry NPC said the threat to food security should not be taken lightly.

“This disruptive activity is damaging to the economic infrastructure, the threat on food security should be taken very seriously. Producers of essential foods have now decided to temporarily shut down,” its deputy president Gladwin Malishe told the African News Agency (ANA).

African News Agency (ANA)