IN TOYOTA’S WORLD
Conference offers insight into Japanese brand’s plans
Toyota South Africa Motors (TSAM) and its Prospecton plant were among the hardest hit casualties of the devastating KwaZulu-Natal floods in 2022.
“This was the biggest crisis we’ve ever faced in the 60-year history of our company, it was unprecedented, even for Toyota globally,” said the manufacturer’s president and CEO Andrew Kirby, speaking at its annual State of the Motor Industry (Somi) event.
According to Kirby, the crisis resulted in a loss of production totalling 32,000 units.
“We lost 10.8-million production parts, had to crush over 4,000 vehicles and lost 104 days of production, Toyota’s dealership team and our employees did remarkably well, they stood up in ways that were incredible. We’ve come out stronger from it, we’re more resilient, but it’s not something that I’d want to go through again.”
Inaugurated in 2017, the brand-specific conference provides insights from high-level executives, forecasts for the sector at large, and previews of forthcoming products.
In previous years, Somi was hosted by investigative journalist Devi Sankaree-Govender. On this occasion, it was trend analyst Dion Chang facilitating discussions.
Despite the major setback presented by the April 2022 floods, the company ended the year on a high note. Toyota sold the most new vehicles in the country in December last year, by a significant margin, recording 11,250 units. Its Hilux accounted for the bulk (2,556 units); followed by the Corolla Cross and Hiace with 1,834 and 1,539 units respectively.
Last year, Kirby had predicted a total of 540,000 new vehicle sales in the country. In reality, 528,963 units were recorded in 2022, which represented a 14% increase over the previous year. Kirby believes that had it not been for the production cessation imposed by flood damages, his prediction would have exceeded the initial figure.
In 2023, he sees the market growing to 570,000 units, citing an improvement in supply.
“We know that in South Africa we have a number of challenges, one of the big indicators for market growth is the interest rate, which has a big impact on affordability – we see that starting to improve as the year unfolds.”
On January 29, the day of the event, the SA Reserve Bank increased the repo rate by 25 basis points, now at 7.25%.
Kirby spoke with concern about loadshedding and its impact on business, adding that it would be difficult to factor in Eskom’s continued instability into the brand’s economic outlook.
Although challenges loom over the market, he noted indicators in last year’s sales trends that appear positive, such as the increase in light commercial vehicle sales, which he believes is a barometer of a rise in small, medium and micro enterprises.
The recovery of the car rental industry was also identified as a good sign.
“We see a big increase in inbound and business-related travel; rental companies
are now starting to replenish their fleets, going into 2023 there is a big order backlog of car rental sales and this portion of our channel will increase.”
He foresees the continued growth of the compact B-segment, including hatchbacks and sport-utility vehicle models.
Demand for extra heavy vehicles was seen as a harbinger of economic growth.
“Right now as of January 2023, we’re talking 12- to 18-month back orders. It does signify there is a lot of opportunity for the movement of goods and services, normally this precedes GDP growth.”
Senior vice president of sales and marketing at TSAM, Leon Theron, expressed his pride in the company’s Prospecton plant staff and dealership network in joining efforts to bring about the facility’s recovery.
“We ended the year off with 43 years of consecutive leadership, I’m not going to complain about that, it was under threat – I’m not going to lie, we had to make serious plans to get to those numbers.”
Theron attributed much of the brand’s success to its compact car portfolio, comprised of by models such as the Urban Cruiser and Starlet, both badge-engineered offerings that have arisen from a global partnership with Suzuki.
He was also proud of the company’s efforts in the electrification space, where, with Lexus and Toyota hybrids combined, it lays claim to a 76% market share.
Theron said consumers can also look forward to more from the Gazoo Racing (GR) high-performance division. Keeping with the theme, the company announced the latest instalment of its GR Cup competition, a racing formula using the 86 sports car.
Arena Holdings, our publishing company, will be represented in the exciting series by group motoring editor Denis Droppa.
The firm staged eight podium-style reveals in a fashion usually seen at a motor show. First up was the latest generation, hydrogen-powered Mirai, an example which will be used for trial purposes. The luxurious Toyota Crown 2.5 E-Four Hybrid also made its debut on local soil. Only a few units will be sold in the country.
Of greater relevance is the latest Fortuner, markedly different from the outgoing vehicle, adopting a more refined look.
Then there was the Toyota Vitz, based on the Suzuki Celerio, which will push the brand’s agenda in the budget-conscious A-segment.
That wasn’t the only Suzuki-based offering that appeared. The new Urban Cruiser is known abroad as the Urban Cruiser Hyryder, which shares its makeup with the new Suzuki Grand Vitara.
On the Lexus front, we caught sight of the fully electric UX, the NX plug-in hybrid and the new RX.
We are expecting to evaluate these models as the year unfolds, so stay tuned.