Export orders for SA-built Toyotas to Europe and Africa are expected to plummet around 15-20% in 2020, says Toyota SA Motors (TSAM).
Speaking at a virtual media conference hosted by TSAM on Wednesday, CEO Andrew Kirby said the coronavirus crisis has had a dire effect on the local motor industry. The national lockdown had so far resulted in a production loss of 13,443 units at Toyota’s Prospecton plant in KwaZulu-Natal, which manufactures the Quest sedan, Hiace minibus, Fortuner SUV, Hilux bakkie and some Hino truck models for the local and export markets.
He said the company had so far been able to secure full pay for its approximately 15,000 employees during the lockdown. He doesn’t anticipate job cuts at the Prospecton factory, though there may be some staff layoffs at some of Toyota’s smaller dealers, and some of TSAM’s component suppliers may not be able to survive.
He said some local automotive components suppliers might not be able to weather the storm and warned that components supply may be re-sourced to other countries if the motor industry doesn’t reopen for business soon.
It all depends on how quickly SA’s vehicle manufacturing industry can recover from the lockdown, which he expected to be lifted in a phased approach over a number of weeks.
His comments came ahead of President Cyril Ramaphosa’s scheduled address on Thursday April 23, where he is expected to announce a gradual relaxation of the Covid-19 lockdown from May 1.
The recently announced programme to start building a new passenger-car model in Prospecton wasn’t under threat, he added. At the company’s annual State of the Motor Industry address in January, Kirby said R2.43bn would go towards the production of the as-yet-unnamed car from October 2021 to replace the Corolla model line. The investment will inject R2.85bn a year into the local economy and create about 1,500 new jobs.
In March, local new-vehicle sales across all brands decreased 29.7% from a year earlier as the lockdown kicked in late in the month, with exports down 21.5%. With almost no sales expected in April, there will be at best a 16% drop in annual vehicle sales for 2020 if things get back to normal as soon as possible, says Leon Theron, senior vice-president of sales and marketing at TSAM.
In Wednesday’s virtual media conference, Kirby also said the Covid-19 crisis would most likely cause a six-month delay in implementing the automotive production & development programme (APDP), from January 2021 to July 2021. The aim of the programme, which is scheduled to run until 2035, is to double vehicle production, double employment, grow the use of SA-made components and increase the number of black-owned companies in the industry.
As part of TSAM’s humanitarian efforts during the Covid-19 crisis, the company has begun producing face shields that will be distributed free to hospitals, first-time responders and Toyota staff. It is also making 40 vehicles available to the taxi organisations, which will be used to implement Covid-19 countermeasures including inspecting taxi ranks.
Toyota will produce more than 100,000 face shields and then hand over the business to a small, medium and macro enterprise and create a new supplier who can then continue operating.
“So we would like to use this as an opportunity to support the country’s need for safety equipment but also use this opportunity to create jobs and a new business opportunity,” said Kirby.
Toyota Financial Services (TFS) is implementing measures to provide relief to individual and business customers whose financial stability has been impacted by the health crisis. Customers who have been affected are encouraged to contact TFS through their preferred channel to make the necessary arrangements.