Toyota bets on SA with R1bn investment

Johannesburg - Toyota is to invest R1bn in production of its model in , giving a vote of confidence to the local auto sector after strikes last year led some to reconsider investment in the country.

Wage-related stoppages in 2013 prompted BMW to say it was freezing expansion plans in the country and left others in a sector that accounts for 6% of GDP considering how much to invest there.

But Toyota said on Tuesday it was pressing on with the investment as part of an expansion that began in 2012.

"The ... investment is the second to be announced in the current phase of capital expansion that started with the R363m new parts distribution centre in Gauteng in 2012," Toyota said in a statement.

However President and Chief Executive Johan van Zyl acknowledged last year's production disruption had damaged the company's reputation.

"We will have to work hard to find a mutually beneficial solution with our labour partners to stabilise production for both the local and export market," he added.

Sapa reported earlier that the KwaZulu-Natal provincial government said it would work with Toyota SA to strengthen the automobile sector in South Africa.

The Toyota Durban manufacturing plant had an annual production capacity of about 220 000 units and contributed in the creation of more than 8 000 jobs in both Durban and Johannesburg, KwaZulu-Natal premier Senzo Mchunu said at the official launch of the new Toyota Corolla at Durban’s Prospecton.

Johan van Zyl, president and CEO of Toyota SA, said the latest development is the culmination of several years of planning and preparation and more than R1bn of direct investment in the production capabilities of Prospecton.

The investment was the second in the current phase of capital expansion that started with R363m in a parts distribution centre in Gauteng in 2012 which followed an R8bn investment in 2008 to increase annual production to 220 000.

“It's hard to believe that a mere two generations of the Corolla ago we were a manufacturing operation with South Africa as our sole market. Today the Corolla, a good example of leading-edge technology, is manufactured in high volumes for local and the export markets," Van Zyl said.

The success of Toyota and the automotive industry’s transformation from local manufacturing and assembly to global manufacturing facilities is due to the successful implementation of the SA government’s Motor Industry Development Programme to encourage high-volume local manufacturing and exports, he added.

Calvyn Hamman, senior vice-president of sales and marketing at Toyota SA Motors, said the fact that South African-produced Corollas will be on sale in Africa and Europe is a feather in the cap for local engineering capabilities.

- Reuters, Sapa, Wheels24