Toyota SA investigating manufacturing other models

Toyota SA wants to add another vehicle to its local production line-up to absorb spare capacity created by diminishing demand for its Corolla car range.

“We are investigating another vehicle to make use of the capacity no longer used by Corolla at our Prospection, Durban plant,” said CEO Andrew Kirby.

He would not identify candidates and did not say whether Toyota SA would continue to build Corollas indefinitely.

Toyota’s Prospecton assembly plant in Durban has annual capacity to build 84 000 Corollas. In 2016, it assembled only 17 728. That number includes the latest Corolla and the Quest, a cheaper version based on the previous-generation Corolla.

Once the dominant product at Prospecton, Corolla is now a junior partner to the Hilux bakkie and its Fortuner sport utility sibling. In 2016, Toyota built 93 063 Hiluxes and Fortuners, from a capacity of 120 000.

“Nothing is finalised. No decision has been made yet. We are investigating a couple of models. We are immersed in a global process of allocating resources within Toyota,” said Kirby.

He says the “sluggish” South African and African economies are “making it difficult to justify such investments”.

Prospecton also builds the Quantum taxi and Hino trucks. Not only is Hilux South Africa’s best-selling vehicle – a title once held by Corolla – but it also dominates Toyota’s exports. In the last six months, Toyota has exported 568 Corollas and 19 036 Hiluxes. Add Fortuner and this number rises to 20 076.

It is the same imbalance in the local market. Over the same period, Toyota sold 24 398 Hiluxes and Fortuners, against 8 462 Corollas. That Corolla number includes the up-to-date Corolla, Quest and Auris, an imported relative.

Kirby said domestic sales had been hurt by a buyer shift away from the mid-market segment in which the Corolla sits.

New-vehicle sales have been in decline since 2014 and straitened economic circumstances have pushed buyers towards entry-level cars, where the main Toyota beneficiary has been the cheaper Etios, which is imported from India.

Kirby said he expected full-year 2017 sales of all vehicles including trucks and buses, to improve marginally over 2016 – 552 000 against 547 545 – but 2018 would be another “flat” year. Exports would also be challenging. Kirby said the collapse of new vehicle sales across Africa would continue to hamper Toyota SA, as it has all motor companies in South Africa.

Of the 43 African countries to which Toyota SA exports, many have been hurt by collapsed oil and commodities prices. Many of the continent’s vehicle markets were dominated by used imports, but as governments began to clamp down on this mostly unofficial trade, Kirby said, Africa would finally start to show its true potential.