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Toyota pumps R450m into local Hiace assembly plant

2019-10-05 11:50
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Toyota South Africa's Prospecton facility in Durban, Kwa-Zulu Natal. Image: Sean Parker

Toyota's investment in the facility that assembles the Hiace Ses'fikile minibus exceeded the R1-billion mark after President and CEO of Toyota South Africa Motors (TSAM) Andrew Kirby announced a R454-million investment at the Prospecton Plant in Durban. 

The latest injection of close to half a billion rand adds to the R74-million in 2012 and the R505-million in 2015 as Toyota moved away from importing the Hiace to assembling the vehicle. 

In addition, 80 jobs have been created as part of the investment which also sees the side body and underbody parts of the minibus now produced locally and no longer imported from Japan. The plant also benefited from a building extension and new robotic welding machines to ensure production efficiency. 

"The local value addition of the Hiace Ses’fikile has increased from 38% to 44%. This localisation has added R422 million per annum local value addition to the economy," Kirby says. 

In seven years, Toyota has gone from importing a complete built-up unit (CBU) to a complete knock-down (CKD). "Since the introduction of the local manufacture of this product we have seen the volumes increase from 9300 units to 14 000 units per year, which equated to an increase of 37%," Kirby announced. 

The local minibus taxi industry is worth around R50-billion a year, according to a Business InsiderMinibus taxis represent 75% of all transport to work, school and university, illustrating how important a driver (pardon the pun) it is to the local economy.  

Toyota says the Hiace controls 96.1% of the market share, an increase from 77% in 2015. 

Minister of Trade, Industry and Competition, Ebrahim Patel lauded the investment into Kwa-Zulu Natal and even challenged KZN MEC of economic development Nomusa Dube-Ncube to change the car provided to her by the government to a Toyota produced at the Prospecton plant. 

"Since TSAM’s localisation programme began, more than 80 000 taxis have been assembled locally by Toyota. If each of those taxis opened its doors to commuters right now, more than a million South Africans would be able to climb in. The increased level of local content is an important part of the 2035 vision for the industry and will increase the participation of more South Africans in this thriving sector of the economy,” says Patel.

Kirby also announced that TSAM will begin its export operations to support the local assembly of Hilux in Kenya at the end of October.

Close to R20-million has been invested to establish a packing plant to support a knock-down business which 20 additional jobs created. Kenyan customers will benefit by being able to buy their vehicles at a more competitive price.

Compiled by Sean Parker

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