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Toyota boosts investment in taxi plant to more than R1bn

And will start exporting Hilux kits to Kenya this month.

Toyota South Africa Motors (TSAM) announced on Friday that it has boosted its investment in its HiAce Ses’fikile taxi vehicle plant in Prospecton near Durban to more than R1 billion since 2012. Its latest R454 million investment will enhance local production of the model by increasing the local value addition.

The manufacturer has also invested almost R20 million in a packing plant to support the commencement later this month of its export operations and local assembly of its Hilux model in Kenya.

Andrew Kirby, president and chief executive of TSAM, says the enhancements to local production of the HiAce Ses’fikile model have created an additional 80 jobs in the plant while 20 additional people have been employed because of the investment in the packing operation.

Localisation boost for the economy

Kirby says TSAM is committed to supporting the South African Automotive Masterplan and has proactively increased the local value addition of the HiAce Ses’fikile to 44% from 38%, with this localisation adding R422 million a year in local value addition to the economy.

The automotive industry and government agreed on the masterplan last year. In terms of the plan, it is envisaged that employment in the automotive manufacturing industry will double to about 240 000 by 2035, with vehicle production increasing from 600 000 to almost 1.4 million units that year, and local content rising from 39% to 60%.

Kirby says the latest investment by TSAM in the HiAce plant followed its initial investment in 2012, adding that it switched from importing the HiAce as a completely built-up unit (CBU) to a semi knocked-down (SKD) vehicle at that point, and to a completely knocked-down (CKD) model in 2015.

“Since the introduction of the local manufacture of this product, we have seen volumes increase from 9 300 to 14 000 units per year, which equates to an increase of 37%.”

He adds: “The most recent increase in demand from our customers to 15 000 units per annum has given us this opportunity to deepen our localisation, which will allow us to improve affordability over time.

“The minibus taxi industry plays a pivotal role within the South African transport system, and as such, is important in supporting the wheels of our economy.”

In terms of market share, TSAM has about 80% of the taxi vehicle market, with the taxi industry transporting more than 15 million or about 70% of the commuting public daily.

Ebrahim Patel, Minister of Trade, Industry and Competition, says the latest investment by TSAM is another major vote of confidence in the capability of the South African automotive industry and the KwaZulu-Natal economy.

Patel says manufacturing is the largest contributor to economic output in the province and supports more than 350 000 direct jobs, noting that more than 80 000 taxis have been assembled locally by Toyota since TSAM’s localisation programme commenced.

“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.”

The investment in the Hilux packing plant follows Kirby’s announcement in February this year that TSAM is expanding its footprint in Africa and considering exporting knocked-down kits for assembly in some countries on the continent.

Kirby said at the time that TSAM had identified a number of core countries in Africa that made sense for this project – including the East Africa bloc with Kenya as its centre, and the West African bloc, which includes the Nigeria-Ghana region – and that a final decision had not yet been made on the countries to which TSAM would export the kits, which would predominantly be Hilux models.

He announced on Friday that production in Kenya will commence later this month, with benefits for customers in the Kenyan market in that they will be able to buy their vehicles at a more competitive price.

He says TSAM is committed to the growth of the automotive industry and, as such, will continue its contribution to the social and economic development of Africa as a whole.

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Seeing taxi drivers running amok on our roads, it’s disappointing to know that industry is gonna be around long term

What happened to the taxi re-capitalisation idea? I seem to remember that the government wanted larger, around 20 seater, taxis to replace the traditional ones. When was this plan dropped?

Good question. Government goes ahead irrespective of how daft the project is but the taxi recap program is the exception. I think the threats by taxi thugs caused them to reconsider. Maybe that is the only way to get Government to take you seriously.

Instead of inciting their members to causing havoc and destruction on the roads these “Taxi Associations” should invest some money into driving lessons for their lawless drivers.

Our cities need improved ‘public transport’ not more taxis. Taxis are not publicly owned and are therefore not public transport. Taxis do transport a mass of people but are throttling the transport system and it is (by far) the industry that kills more people than any other in SA – way way more than say mining.

So, get real and get the public transport system right.

Toyota have found a dumping ground for their gas guzzlers……no chance of electric vehicles catching onin SA at this rate! Pity.

Using mass transit as an example of poor fuel economy is really reaching. Shame. Wait till you see all the bakkies been driven to office jobs by one passenger.

You all right there? This is why no one can take you lot seriously.

Every single provider to the taxi industry must be put under extreme pressure until the safety record of the industry improves.

Go for it.

Or was your idea of ‘extreme pressure’ making some proclaimation?

@Anything – maybe time to take your medicine, calm down and have a nice cup of tea and a bikkie?

Aah sorry to have got in the way of your braai huffing and puffing. This is why no one takes you lot seriously anymore. All “someone should” and no action.

And you get so defensive when you get called out for it too! Hilarious!

Anything
A form of transport that is lawless and results in the deaths of thousands should be addressed by authorities but it seems the deaths of mainly low income Blacks at the hands of reckless taxi-driver thugs does not warrant Government attention in South Africa. Thus other segments of society should take a stand and object. I suggest those supporting the taxi industry and not promoting safety standards in an industry that is a stain on our country should be identified and consumers should be encouraged to ‘shop elsewhere’. The fact that companies are benefitting from an industry that has caused the deaths of so many and destroyed so may families is tragic to me. How many more must die before something is done?

Why dump monies into a country that thrives on strikes and all kinds of labour disputes ??? In addition the government is NOT business friendly.

Talk about a risky investment !

Thats business, inveatment 101. The higher the risk the greater the reward. South African businesses would not venture into the risky African jungle unless they trade offs between risk and reward were more inclined to reward than risk.

Yet you live there.

Toyota makes more money in SA in a hour than you will over the course of several life times.

Yes, because of trade barriers, tariffs and protection – state support that costs us all more money.

So then why are you confused about why they would invest in business there?

You really haven’t thought this through. At all.

But more investment by Toyota for taxis is NOT good news if you are a taxpayer unless you work for Toyota. The taxpayers will all have to club in to pay Toyota more “export incentives” than they are getting already. It is not a thriving business generating positive revenue or foreign exchange. They re just parasites. Prove me wrong.

Paul, that’s precisely the point I am making. It’s perfectly rational for Toyota to invest in a protected, subsidised industry. Frankly, who wouldn’t? That doesn’t make it rational or acceptable to the average citizen, taxpayer or motorist in South Africa who is paying over the odds for vehicles to protect inefficient local manufacturers from open global competition. It isn’t hard to grasp, but seems to elude some people…

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