Since 2003 Toyota South Africa has transformed itself from a small local vehicle supplier into a major international car and component exporter. In March the company announced that five years spent upgrading its manufacturing plant in Prospecton, Durban, will allow it to produce 220 000 units this year, 147 000 of them to be shipped to Europe and Africa.
These exports will account for 60% of South Africa’s total vehicle exports. Including components, the potential value of the exports is some R20-billion, nearly 1% of the country’s gross domestic product.
At a ceremony launching new model Corolla sedan exports to Europe and Africa, South African Minister of Transport Jeff Radebe commended Toyota for its commitment to local empowerment, saying that almost half of its total investment had been spent with accredited black economic empowerment companies.
Radebe said vehicle exports account for 7% of South Africa’s total exports, and attributed the ongoing success of this sector to the government’s Motor Industry Development Programme.
“South African vehicle exports are projected to rise strongly this year,” he said. “And it is a well known fact that our domestic new vehicle sales increased by a record 22% in 2004, followed by a new record of 27% in 2005, making South Africa one of the best performing automobile markets internationally.”
Other dignitaries in attendance included King Zwelithini of the Zulu nation, Japanese ambassador Akihiko Furuya, eThekwini municipality mayor Obed Mlaba, and the vice chair of Toyota Japan, Katsuhiro Nakagawa.
Johan van Zyl, president and CEO of Toyota South Africa, said the Prospecton plant now boasts of cutting-edge manufacturing technologies. “This historic occasion aligns Toyota South Africa closely with a number of other Toyota global production facilities, each with an annual manufacturing capacity of 200 000 to 250 000 vehicles,” Van Zyl said at the ceremony.
“Together with component exports the potential value of Toyota’s exports for the year is in the order of R20-billion, a number that is close to 1% of South Africa’s gross domestic product.”
Turkey is the first country to receive Toyota Corolla vehicles from the Prospecton plant, while Toyota vehicles manufactured in South Africa will be exported to more than 40 global destinations during 2008.
Toyota’s 220K programme
Since its entry into the local market in 1961 Toyota has been one of South Africa’s most popular motor brands. In 2002 the company, with parent company Toyota Motor Corporation (TMC), embarked on a programme to elevate the local manufacturer into a valuable export base that could supply markets in Europe and elsewhere in Africa.
At the start of the programme, known as 220K, Toyota SA’s manufacturing capacity was 100 000 vehicles. The upgrade took place in three stages. During the first phase Corollas were exported to Australia. The second phase saw Toyota SA named as a global manufacturing hub for the new Hilux pickup truck (known locally as a bakkie) in the markets of Europe and Africa.
The third phase commenced with the announcement that the Corolla sedan was also destined for European and African showroom floors. Both models are produced in South Africa in right- and left-hand drive variants.
In order to meet this requirement new facilities and technologies were introduced – a multi-billion rand investment. Said Van Zyl, “This investment was made not only to increase annual production volumes to a required 220 000 units but also to ensure that this volume is achieved in accordance with the strictest global quality standards defined by TMC.”
Van Zyl praised TMC for its high level of support, saying that it has led to greater efficiency across the supplier network and allowed the Prospecton plant to adopt true “Just in Time” manufacturing principles, cutting down on lead times and stock levels of components.
He said that virtually every area of the manufacturing operation has been modernised – the oldest significant manufacturing facility at Prospecton is a mere six years old. Among the newly installed plants are a water-based paint plant, a press shop expansion, a new facility for manufacturing resin components such as dashboard panels and bumpers, and a new stamping plant. In several cases this is technology that has been introduced outside Japan for the first time.
“We now have the production facilities and systems in place to produce at the volumes and quality levels that justify our inclusion in the Toyota global production network. Our quality inspection processes are continually audited by TMC for compliance with international quality benchmarks,” said Van Zyl.
Investing in people
About 4 000 new job opportunities have been created by the initiative – Toyota employs around 10 000 people in South Africa. In addition, the company has made a substantial investment in training and has spent R300-million on the development of its workforce over the past five years. Of these, 174 people have visited Japan for training in the Toyota Way, a philosophy that is supported by two core values – respect for people, and continuous improvement.
And there have been other benefits. Said Van Zyl, “The 220K project has provided an environment that has encouraged 12 new international suppliers to invest in South Africa. Eight are from Japan and four from Europe. Nine have invested in their own right and three are joint ventures with South African companies. The impact of the Toyota South Africa 220K project is far-reaching and substantial.”