With about 44% of Toyota’s total production from its Durban plant exported to Europe, Toyota South Africa Motors (TSAM) is set to face a tough challenge as that market increasingly moves to hybrids and battery electric vehicles (BEVs), warns TSAM president and CEO Andrew Kirby.
“The transition in Europe [to electrified vehicles] is going to be quick, and if we want to retain those exports, we will have to adapt to manufacturing either a low- or zero- emission Hilux.
This is a pressure point for us. It will have an enormous impact on us – the supply chain, and the economy – if we lose that market.”
Europe is set to ban internal combustion engines by 2035, with increasingly strict emissions standards to be rolled out in the run-up to this deadline.
Kirby notes that TSAM has, “as of today”, no production solution yet.
“We are working with the entities responsible for Hilux design in Japan and Thailand, and we are also looking at what we can do from a production point of view.
“From a business point of view, this is certainly one of the most critical challenges we face as a company.”
Toyota in Japan will this year, most likely, decide where it will produce its forthcoming new-generation Hilux.
Any support TSAM will receive from the South African government in its production evolution to new-energy vehicles (NEVs) – fuel cell vehicles, hybrids, plug-in hybrids (PHEVs) and BEVs – remains unclear.
Kirby says the Department of Trade, Industry and Competition has indicated that there will be an announcement in February’s Budget Speech on the long-delayed support policy on the advancement of NEVs in South Africa.
He adds that TSAM is gearing up to sell as many NEVs locally as possible, despite the energy crisis and the limited number of charging stations, of which there are only 276 at the moment.
TSAM is committed to increasing its NEV sales to at least 20% of its sales mix by 2025.
“We don’t have all the answers yet, and we don’t have all the supply yet,” says Kirby.
“[As noted], one of the challenges we have as a sector is that we don’t yet have a committed direction or support programme from national government.
And, as we don’t have a well-defined programme to support the manufacturing and sales of NEVs, we are not [seen] as a priority market for these scarce battery vehicles.”
TSAM currently holds a 76% share of South Africa’s small NEV market, says TSAM sales and marketing senior VP Leon Theron.
This is largely boosted by sales of the Corolla Cross hybrid, produced in Durban.
Theron says TSAM will this year add a Lexus PHEV to the local sales portfolio, with another Lexus PHEV and BEV to undergo tests for possible local introduction.
The brand-new Crown hybrid will also be added to the mix.
A Mirai hydrogen fuel cell vehicle is already in the country for the purpose of a new-energy project in partnership with Sasol.
The Mirai has already been refuelled locally by Sasol.