Toyota SA has begun exporting Hilux bakkie kits for reassembly in Kenya — the first step in what it hopes will become an Africa-wide network of vehicle manufacture.
CEO Andrew Kirby said the first reassembled Hiluxes would go on sale later in October. Deemed locally manufactured, they will avoid import duties and be cheaper than current products.
Hilux kits will be boxed at Toyota SA’s Prospecton, Durban, manufacturing plant, which already builds completed vehicles for markets in Europe and Africa.
Kirby says reassembly will not immediately increase Kenyan sales — kits will simply replace completed vehicles — but lower prices should increase demand. The immediate target is to ship about 1,200 kits in 2020.
Seven Hilux variants will go to Kenya, with double-cab versions accounting for most of the volume. Toyota SA has invested R20m at Prospecton to make it happen.
Kirby says the Kenyan importer will initially rely on Toyota SA for the entire Hilux but expects to gradually introduce local content. He believes some local parts, such as batteries and glass, could be introduced by the end of 2020.
The long-term plan is to create a sustainable Kenyan vehicle assembly industry, preferably in co-operation with East African neighbours such as Tanzania, Uganda and Rwanda. It is part of an ambitious plan, driven by the South African government and motor industry, to establish a series of interlinked, regional industries across Sub-Saharan Africa.
In theory, SA, Kenya and Nigeria will be the manufacturing hubs of these regions, with neighbours feeding into them with components, technology and services. Multinational motor companies have made it clear that SA, with its many decades of vehicle manufacturing experience, must guide the process. Kirby hopes Toyota SA’s Kenyan venture will be the first of several across Africa.
A number of local motor companies are already supplying vehicle kits to Nigeria, trying to get its industry under way. Volkswagen SA has been particularly active in regional partnerships. It exports vehicle kits for reassembly in Kenya and Rwanda and has signed preliminary agreements with Nigeria, Ghana and Ethiopia.
Kirby announced the Kenyan venture along with the news that Toyota SA is spending a further R454m on local assembly of the HiAce Ses’fikile minibus taxi. The new cash injection, which brings investment in the model to more than R1bn, will increase local content from 38% to 44%.
By sourcing an additional 17 components from SA suppliers, the company will increase its local spending by R422m and create 80 new jobs in the Prospecton plant. The Kenyan kit project will add another 20.
Prospecton is expected to build about 15,500 HiAces in 2019, rising to 18,000 annually in the near future. The company says the vehicle accounts for about 95% of SA minibus taxi sales.