R4.3bn for Toyota’s SA plan
IS THERE a silver lining amid the gloomy economic outlook in South Africa?
In typical Mzanzi fashion… there is and there isn’t.
That’s the news that came out of last week’s third instalment of Toyota’s state of the motor industry address at Kyalami.
According to Etienne le Roux, RMB’s chief economist, there are a number of reasons why things will continue to be difficult in 2020.
“We expected an upswing after President Cyril Ramaphosa was elected but this didn’t materialise.
“The government has also reduced spending. They almost halved their purchase of vehicles between 2015 and 2019. Consumers are under pressure and they make up 60% of the economy.
“With the very real possibility of further load-shedding as well as the tax base being eroded by emigration, it’s difficult to paint a rosy picture,” he said.
Single cab bakkies have been a measure of how business is doing and a 7.5% decline in sales last year for Toyota is the reality of where the economy stands.
In addition, disposable household income is under average CPI inflation and tax on income and wealth is at an all-time high.
Despite the challenges though, Toyota announced that they would be injecting R4.28 billion across its divisions over the next few years.
R2.43bn has been earmarked for the production of a new passenger car model at Prospecton in KZN from October 2021.
It will replace the Corolla production line and will include for the first time on the continent the production of a Toyota Hybrid Synergy Drive vehicle.
“Toyota is solidifying its commitment to local manufacturing,” said Andrew Kirby, president and CEO of Toyota South Africa Motors.
“The investment will generate R2.85bn towards the economy per annum and will generate about 1 500 jobs.”
A further R454 million sees enhancements to production of the HiAce Ses’fikile and R91m to increasing production from 14 000 to 18 000 units per annum.
That will create a further 270 new jobs.
R20 million has also been allocated to the establishment of a packing plant to support the Hilux business in Kenya.
Toyota’s Atlas warehouse will be doubled to 80 000m² in 2021 and it will be the largest warehouse in the southern hemisphere.