Toyota South Africa said on Thursday it would invest R4bn in its parts distribution and manufacturing projects in the country, in what is expected to give the local economy a boost and create 1500 new jobs.
The Japanese car maker has a warehouse in Johannesburg and a car assembly plant in Prospecton, south of Durban.
Over R2bn of the investment has been earmarked for the production of a new passenger-car model, to replace the Corolla production line which is coming to an end this year, the company said in a statement.
The production of the new vehicle is expected to start in October 2021.
“With this investment, Toyota South Africa Motors is solidifying its long-term commitment to local manufacturing as well as the South African automotive industry," said president and CEO of the company, Andrew Kirby.
He added that the investment would give the local economy a boost, generating an expected R2.85bn per year and creating approximately 1 500 new jobs.
The investment follows an announcement in November by the National Association of Automobile Manufacturers of South Africa (Naamsa) to launch a R6bn Automotive Industry Transformation Fund.
The fund, announced during President Cyril Ramaphosa's second Investment Summit, is aimed at supporting black participation in the automotive industry supply chain through upskilling of entrepreneurs in the sector.
Including auto manufacturers such as BMW, Ford and Mercedes Benz and a host of component suppliers, the industry employs over 100 000 people and contributes 6.9% to the gross domestic product (GDP).
Pockets of investment
Toyota said other pockets of investment would include R454m towards improving local production of the mini bus Hiace Ses’fikile, as well increasing production volume from 14 000 to 18 000 units per year. The process will result in the creation of 270 new jobs.
The company will also plough R365m into doubling the size of its Atlas Warehouse - it said this facility will be the largest in the Southern Hemisphere once it is complete in 2021.
Last year, government and Ford SA unveiled the Tshwane Automotive Special Economic Zone, which will focus on supplying components to car manufacturers in Tshwane.
The first phase of the hub, which is still under construction, is expected to create 7 000 jobs. Once complete, the SEZ could create an estimated 70 000 jobs.
South Africa has seen large-scale jobs losses in the recent past, with the unemployment rate rising to 29% in 2019.