Japanese automaker Toyota, recently announced that it has invested over R6,1 billion to facilitate production of the all-new Hilux and Fortuner at its Prospecton plant in Durban. This reaffirms Toyota South Africa Motors’ (TSAM) position as the largest automaker in South Africa, manufacturing no fewer than five individual models (Hilux, Fortuner, Corolla, Corolla Quest and Quantum) in CKD or complete-knock-downform, as well as selected Hino and Dyna models produced as SKD or semi-knocked-down assemblies.
“This latest announcement gives evidence of a company that is defiantly committed to South Africa by strategically investing in the people, tools and equipment to produce cars and commercial vehicles of world-class standard that are not only destined for the domestic market, but will also fly our flag high on the international stage thanks to a robust export plan. But it is in fact more than that – it’s also a celebration of the pivotal role that both Hilux and Fortuner play in the overall development of the South African motor industry,” TSAM President and CEO Andrew Kirby said at Toyota’s Prospecton Plant.
Dr Johan van Zyl, Chairman of Toyota South Africa and Chief managing Officer of Toyota Motors Europe echoed Kirby’s sentiments, adding that, “the TSAM of today is vastly different to the same company only 10 years ago. This is all due to an ability to change with the times and I am glad to say that as we have changed, we have become better and more focussed to the benefit of our customers.
Van Zyl did however reiterate the importance of stability on the production line: “Although we are justifiably proud of the achievements of the motor industry in growing production and especially exports post-1994, we must remember that South Africa currently produces less than 1 percent of the 90-million vehicles made world-wide each year.
“We have to remain world competitive not only in terms of wages and productivity, but also regarding labour stability. I cannot stress enough the importance of engagement – engage, engage and engage again – the need to employ dispute resolution as the first and ultimately only line of defence rather than resorting to strike action as the solution.
“Nevertheless I am confident that a fair and equitable labour agreement can be reached and rest assured, that no matter what, Toyota will do its utmost to continue to put its customers and South Africa first.”
This latest announcement represents the biggest single investment Toyota has made to date. Unpacking the R6,1 billion investment – R1,9 billion relates to supplier tooling, R1,4 billion to in-house tooling and the remaining amount to investment in in-house facilities and buildings to cater for the new press machines.
Toyota’s component plants (sited across the road from the main plants) also had to undergo some major ‘facilitisation’ with the ladder frame or chassis plant being completely reworked for the newly designed chassis which is a unique selling point of the new models. It was also an opportune time to introduce new global equipment which provide improved accuracy, quality and process stability, while at the same time increasing the automation levels at this facility.
New facilities were installed for the manufacture of a variety of other in-house components including the new instrument panel, exhaust assembly, brake and clutch assembly, rear bumper reinforcement, catalytic converter, rear and front axle assemblies as well as the painted resin front bumpers. It’s worth noting that the previous Hilux and Fortuner models had in the region of 1 500 local parts and for the new models, this number has swelled to 2 700. This achievement goes some way to answering the call from the local component supplier industry for increased localisation in vehicle manufacture.
In addition to TSAM’s investment of R6,1 billion, Toyota’s suppliers have also made substantial investments amounting to over R1,7 billion, while also attracting five, new, international suppliers; creating further employment in the supply chain (as many as 2 000 new jobs) – all of which ultimately contributes to increased localisation of parts and modernisation of facilities and processes.
This has had a direct knock-on benefit for production capacity at the Prospecton plant which has now increased from 120,000 p.a. to 140,000 p.a. Hilux and Fortuner are core vehicles for Toyota locally from both a brand and production perspective, and hence contribute a sizeable 80 percent of total production volume.
Hilux and Fortuner are the undisputed segment sales leaders, and in the case of Hilux, it also wears the “SA’s most popular vehicle” crown, a distinction it has enjoyed 43 times in 47 years. Local sales now exceed a million vehicles and Hilux is, in fact, the longest-running vehicle model name on the South African market. Sales volumes for Hilux are estimated tobe in the region of 3,400 per month with Fortuner forecast to achieve an average of 1,100 retail units per month. Source: auto world.co.za