Riots, looting could be speed bump for foreign investment in SA, cautions Toyota SA CEO

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Andrew Kirby, CEO of Toyota SA.
Andrew Kirby, CEO of Toyota SA.
  • Illegal behaviour in SA has become somewhat of a grey area and that is of concern for Andrew Kirby, CEO of Toyota South Africa Motors.
  • He spoke to Fin24 on the sidelines of Toyota's official launch this week of its Toyota Corolla Cross hybrid production line at its plant south of Durban.
  • A lot still has to be done, in his view to address illegal behaviour in a more concrete way.

It is concerning that illegal behaviour seems to have become "a bit of a grey area" in South Africa and that could end up not boding well for investment in SA by foreign investors, according to Andrew Kirby, president and CEO of Toyota South Africa Motors (TSAM).

He spoke to Fin24 on the sidelines of Toyota's launch on Tuesday of the first hybrid electric vehicle manufactured commercially in South Africa - the Toyota Corolla Cross hybrid - at its manufacturing plant south of Durban. The electric battery "self-charges" through the petrol engine or by recovering energy by means of regenerative braking. 

It is a flexible production line with both left- and right-steering capacity.

There is capacity to make 30 000 of these vehicles per year. It will be exported to more than 40 countries in Africa. The economic contribution is more than R1.4 billion per year for SA. The plant also manufactures Hilux, Fortuner, Corolla Quest and Hi-Ace models. 

President Cyril Ramaphosa did the official opening of the Corolla Cross hybrid production line at Toyota's plant in Prospecton. South Africa has identified three key priorities for climate action, including increased production of electric vehicles, Ramaphosa said.

When widespread unrest and looting broke out in KwaZulu-Natal in July this year, Toyota's manufacturing operations were forced to close for more than a week. Exporting vehicles from the plant was impacted as well as the ability to make deliveries to Gauteng due to the closure of the N3.

TSAM's parent company, the Toyota Motor Corporation's (TMC), headquartered in Japan, voiced its concern, sending a letter to the eThekwini municipality requesting an action plan from local government. The focus of the letter was a plea for a definite plan of action from the local authorities. The aim was to save jobs and prevent disinvestment. The municipal and provincial authorities then responded by presenting a recovery roadmap to address concerns raised.

"Our concern in the letter at the time was that we did not see a cohesive plan in Durban and KZN to address the breakdown in law and order and we wanted to hear how it will be addressed. We engaged with the authorities on a few occasions since then and we realise that a lot still has to be done, but the way illegal behaviour is managed needs to improve," Kirby explained on Tuesday.

"One understands the difficulties in SA and we see our role to try and strengthen social cohesion, but there needs to be a more concrete approach to address illegal behaviour."

Despite the challenges like the unrest, Kirby describes the journey to the official launch of the Corolla Cross Hybrid as "an incredible journey to a historic moment".

In 2019, Ramaphosa had called upon Japanese carmakers to strengthen their investment in South Africa. At the president's second South Africa Investment Conference during that same year, Kirby announced Toyota's new investment of R2.6 billion of the Corolla Cross production.

"[The Corolla Cross hybrid] places confidence in our ability to build in SA. We hope it will surpass all expectations. This project is our catalyst for change and only six other countries in the world will manufacture this model. We want to make a difference in SA. Toyota is for green mobility for SA and the rest of Africa. We have a road map to carbon neutrality along the entire value chain," Kirby said at the launch event.

"If you tally up the investments we've made in this plant spanning the last five years – of which Corolla Cross accounts for R2.6 billion, we arrive at a cumulative figure of over R6.5 billion. So, we are, therefore, committed to further developing and strengthening our business in South Africa and making a difference in the country, our communities, our suppliers, dealers, customers and of course in own employee’s lives."

The introduction of the Corolla Cross model has generated a total of 575 new jobs at the TSAM plant while over 1 200 direct jobs were created in the component supply base. Another significant focus during the project was to maximise the local content for this model.

TSAM has set an ambitious target of selling more Corolla Cross hybrid models than traditional internal Combustion Engines (ICE) models by 2025.

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