SOUTH AFRICA – Toyota South Africa Motors (TSAM) has invested almost US$198 million in South Africa for the production of the new Corolla Cross sport utility vehicle (SUV) at its manufacturing plant in Prospecton near Durban.
In 2020 Toyota announced plans to invest around US$158 million in building a new passenger car in South Africa, one of its executives hinting that this new vehicle would form part of the company’s new ‘Corolla strategy.
TSAM president and CEO Andrew Kirby said that production of the Corolla Cross will commence in October 2021, with the investment generating about US$198 million in additional component purchases in the South African economy and creating 1,500 new jobs at the plant and in the supply chain.
“This takes us a step closer to the South Africa Automotive Masterplan goals that we have set ourselves and, quite frankly, would not have been possible without the policy certainty and progressive stance by the South African government with the introduction of the APDP2 [Automotive Production and Development Plan] trade-related investment measure,” he said.
We knew that was a conservative figure and we are well over the US$178 million and so closer to a US$198 million figure at the moment.”
Kirby said production of the new Corolla Cross is a significant milestone for Toyota SA because it is not often the company has the opportunity to produce a new body shape at its factory.
“We have got to keep up with the electrification process in Europe because they are dominant and are our biggest export market. We need to position ourselves as being the dominant manufacturing hub for Africa and that is going to be more ICE [based] for many years to come”Andrew Kirby – TSAM president and CEO
It will be exported to 43 countries in Africa, with Toyota projecting a 7%-a-year growth in the SUV market in Africa, which will provide significant growth opportunities for it to expand production of the new model.
TSAM executive VP of manufacturing and support Nigel Ward said the manufacture of the new model will include the development of three new Tier 1 and a number of Tier 2 suppliers, which is a significant step towards the transformation of the automotive value chain.
Kirby added that the new Corolla Cross will have a high level of local content and that TSAM has been working on localising parts over the past few years.
“Our concern is two to three years’ time because, with the softer market and softer production environment, it’s becoming a little bit more challenging to increase the levels of local content. But that is the challenge we have, and I think we will make progress,” he clarified.
Kirby believes there will be a big swing towards hybrid vehicles in the domestic market, with the Corolla Cross providing motorists with access to an affordable hybrid adding that to do this on South African soil is good because it is obviously the future direction from a technology point of view.
“We have been wanting to not just sell hybrids but actually localise [them]. That is the big challenge for the whole automotive industry. How do we localise the whole electrification process in the future?” he said.
“We have got to keep up with the electrification process in Europe because they are dominant and are our biggest export market. We need to position ourselves as being the dominant manufacturing hub for Africa and that is going to be more ICE [based] for many years to come,” he concluded.