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Here's how Toyota will spend its R6.1-billion investment in SA

2016-05-24 15:05

MASSIVE INVESTMENT: Toyota invested R6.1-billion in local production of its Hilux and Fortuner models. Image: QuickPic

Durban - Japanese automaker Toyota, 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. 

Toyota South Africa president and CEO Andrew Kirby said at the automaker's Prospecton Plant: “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.”

READ: Toyota's R6.1bn SA investment: Zuma to 'launch' Hilux, Fortuner

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.”

READ: Ford to invest R11.5-million in South Africa

55 Years of Continuous Investment

Toyota’s heritage in South Africa spans more than 55 years and the company has been the beneficiary of ongoing investment since its manufacturing inception in 1972 when the company started operations at Prospecton.

Recent investment highlights:

- In 2011 a new green field’s warehouse facility was constructed in Boksburg. 

- In 2012 an SKD operation for the Quantum taxi commenced and then in 2015, Toyota invested further in this facility, when it was converted to a full CKD production plant – this required an all-new plant at Prospecton. The last phase is scheduled for completion in July this year. This will see volumes increase from 9,500 units to 13,000 units per year, which equates to an increase of 37 per cent.

- In 2014 the Prospecton plant was upgraded to start production of the all-new Corolla and Corolla Quest.

- 2014 was also the year a brand new vehicle storage site in Prospecton came on stream. 

 -2014 was a busy year for Toyota, as it was also the inauguration of the new Hino plant in Prospecton

The R6.1-billion investment

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.  

READ: Ford invests R2.5bn to build new Everest in SA

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 1500 local parts and for the new models, this number has swelled to 2700. 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 2000 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% 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 to be in the region of 3400 per month with Fortuner forecast to achieve an average of 1100 retail units per month.


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