Toyota eyes African markets
Exports await conclusion of trade deals
TOYOTA South Africa is considering exporting its locally produced Quantum/Ses’fikile minibus taxi vehicles to more markets on the African continent.
This follows the opening earlier this week of its new R550 million completely knocked down Quantum/Ses’fikile minibus taxi vehicle plant in Durban.
However, Johan van Zyl, the chief executive of Toyota for the Europe and Africa regions, said the first phase of the project was to just look at the domestic market, although it was already supplying the Quantum/Ses’fikile model to markets such as Namibia, Botswana, Swaziland and Lesotho.
But Van Zyl said as progress was made with trade agreements in Africa, the company would then continue with completely knocked down exports of this model to those markets as well.
The plant was set up to produce 9 600 units a year, but domestic market demand has been much higher than this and Toyota SA is already looking at ways to increase its capacity through process improvement and low investment.
Investment
Further investment in the plant to increase its capacity appears to be essential if the company manages to secure major export orders for the Quantum/Ses’fikile models into African markets.
Rob Davies, the Trade and Industry Minister, said South Africa continued to make progress in the development integration programmes that sought to broaden the market on the African continent to support manufacturing operations that would target not just single countries or even individual regions, but large swathes of the African continent.
Davies said the tripartite free trade area legal text was opened for signature earlier this month at a summit held in Egypt and a target date was set of concluding the negotiations for the tariff schedules within a year.
He added that South Africa, as part of the Southern Africa Customs Union, had already exchanged tariff offers with the East African Community and was engaged in negotiations with them and was close to exchanging offers with Egypt.
“That leaves us with a small number of other countries, but fundamentally, with the big players in the tripartite,” he said.
Davies said the Continental Free Trade Area negotiations were launched at the AU summit held in South Africa last week with “a highly ambitious timeframe to conclude them by 2017”.
“So I think we are making progress in building the African market,” he said.
Davies said his department in 2012 had established the people-carrier automotive investment scheme (P-AIS) as a sub-component of the automotive investment scheme in the Automotive Production and Development Programme (APDP).
Incentive
He said this incentive was designed to grow and develop the automotive sector in the area of transport vehicle manufacturing and provided a non-taxable cash grant of between 20 percent and 35 percent of the value of qualifying investments in productive assets approved by the department.
Davies said this scheme had since its inception resulted in support for three minibus assembly projects, with Toyota’s project by far the biggest, involving a total investment of R158m and supporting 680 direct jobs.
He declined to identify the other two manufacturers who were recipients of the incentive.
Davies said the P-AIS was part of the broader APDP policy support programme that was aimed at creating an environment that would allow the local industry to reach its Vision 2020 target of doubling local vehicle manufacturing and reaching the target of producing 1 million vehicles.
He said this particular project was also conceived within the framework of the Africa taxi programme with a view to producing vehicles that would find a market not only in South Africa, but elsewhere on the African continent.
The first phase of the project is to look at the domestic market and then progress with exports of the model.