Durban: Toyota South Africa today announced a new R1bn investment in its plant in Prospecton, Durban, as the production line slid into action to roll out the new Corolla model. This investment is in stark contrast to BMW, which last year announced it was pulling out of a R1bn expansion of its plant at Rosslyn near Pretoria.
Johan van Zyl, the ZA Toyota CEO, said that the investment came despite challenges:
“The seven week long production disruption in the last quarter of 2013 damaged our reputation as a trustworthy and stable supplier of vehicles,” he warned. “We will have to work hard to find a mutually beneficial solution with our labour partners to stabilize production for both the local and export market.” And van Zyl suggested the investment was an act of confidence by Toyota Japan in Toyota SA. He said that the investment is underpinned by the latest incarnation of ZA’s investment incentive programme for the automotive sector, known as the APDP – which will help encourage an expansion of local content.
This trend will also be supported by the weak rand. However, he pointed out that with the weak rand, manufacturers will not automatically be able to boost exports, and that the fluctuating currency makes it ‘difficult to establish yourself as a reliable supplier. A weak rand doesn’t mean that you suddenly export more…”
Van Zyl said the current investment was decided before the recent 7 weeks of strikes, but ZA needs stability. “If you are only a supplier to the domestic market, they may be prepared to accept this. But in a global market environment, you must behave like a global player. Strikes are not unique to South Africa, but you don’t have a seven week strike like this.”
He welcomed the project to transform the old Durban airport into a new harbor, as it is close to the Toyota plant, saying that once this has been achieved, Toyota will be able to reap “enormous savings” in getting vehicles on to ships for export.
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