The almost R500 million investment by Toyota South Africa Motors (TSAM) in the expansion of its minibus taxi manufacturing plant in Durban is another “vote of confidence” in the capability of the South African automotive industry and the KwaZulu-Natal economy, Trade and Industry Minister Ebrahim Patel said on Sunday.
Patel launched the plant in Durban this past week. The expansion is part of the Toyota South Africa Motors Hiace Ses’filikile plant.
“Manufacturing is the largest contributor to economic output in the province, supporting more than 350,000 direct jobs,” Patel said in a statement issued by the trade and industry department (dti) on Sunday.
Patel encouraged the automotive industry to prioritise local production of vehicles in line with the automotive master plan and to look at electric and hybrid vehicles in future expansion plans.
“Last year, government and stakeholders adopted an automotive master plan, aiming to achieve one percent of global vehicle production by 2035 (increase from current 600,000 units to almost 1.4 million units a year) and increase Iocal content from current 39 percent to 60 percent. The master plan is targetting to double employment in the value chain from current levels to about 240,000 and also to achieve at least level 4 BEE status from 2021,” Patel said.
He indicated that localisation should be a driver of development and opportunity, noting that localisation built a country’s manufacturing footprint.
“Since TSAM’s localisation programme began, more than 80,000 taxis have been assembled locally by Toyota and another smaller assembler. The increased level of local content is an important part of the vision for the industry and will increase the participation of more South Africans in this thriving sector of the economy. It is also a practical implementation of the commitment Toyota made at the investment conference last year,” he said.
TSAM president and CEO Andrew Kirby said in terms of the South African Automotive Masterplan (SAAM), local automotive value addition needed to be exponentially increased.
“TSAM is committed to support the SAAM and has therefore proactively increased the local value addition of the Hiace Ses’fikile from 38 percent to 44 percent. This localisation has added R422 million per annum local value addition to the economy. Even more encouraging is the fact that we’ve been able to create an additional 80 jobs in the process,” said Kirby.
He also announced the start of the company’s export operations to support local assembly in Kenya of Hilux vehicles.
“TSAM is embracing the direction of local assembly, and has therefore invested close to R20 million for the establishment of our packing plant to support this knock down business. Start of production in Kenya will be later in October 2019 and customers in Kenya will benefit by being able to buy their vehicles at a more competitive price,” Kirby said.
Kwazulu-Natal economic development, tourism, and environmental affairs MEC Nomusa Dube-Ncube said plans were under way to develop an automotive supplier park in the south of Durban.
The environmental impact assessment (EIA) on the site had been completed. She added that the provincial government was committed to ensuring that local communities were beneficiaries of the supplier park.