TOYOTA South Africa Motors (TSAM) was due to resume normal production at its Durban plant this morning after a shutdown of more than a week amid an orgy of looting and unrest that cost the country an estimated R20 billion in stolen and damaged property.
This encouraging sign of a return to semi-normalcy comes after the company, said to be Durban’s biggest ratepayer, received a “recovery roadmap” from the eThekwini Municipality and assurances of support from the national and KwaZulu-Natal governments.
Last Thursday, TSAM sent a letter to Mayor Mxolisi Kaunda in which it appeared to express uncertainty about the future of its investment in the city.
In the letter, Toshimitsu Imai, Chief Operating Officer Africa region for Toyota Tsusho Corporation and General Manager Africa support division for Toyota Motor Corporation, said the closure of the plant jeopardises TSAM’s future sustainability as they embark on their recovery following the pandemic.
“The loss of production over the past week means that TSAM will more than likely lose some of this business to one of our other global Toyota affiliates because our European customers will not wait for their orders,” Imai said.
“Built up vehicles destined for the export markets also cannot be shipped due to the closure of the port.”
He added that the closure of the N3 to Gauteng meant the company would be unable to deliver vehicles to customers in Gauteng. “Thus, we expect sales to drop by as much as 10% in July.”
Another key initiative potentially jeopardised by the shutdown was the launch of Toyota first locally produced new energy vehicle this year. Imai said this was a “graduation” project for TSAM to demonstrate its ability to produce other alternative energy vehicles in Durban.
“However, given the uncertainty around the current unrest, they risk missing key deadlines and the opportunity to challenge for other new products.”
He added: “While the local management team have been working closely with the leadership of the City, they are unable to provide us with any clear direction/plans on how the City intends bringing stability and order back to the City.”
Subsequent reassurances from the municipality and national and provincial government appear to have eased some of the concerns expressed in the letter, with TSAM releasing a statement on Monday 19 July stressing that the aim was to voice concern over the future risk of conducting business in KZN and to understand what government was doing to tackle long-term stability issues.
“Since issuing the letter, TSAM can report that there has been positive engagement with national government in particular and that this has gone a long way to allay the fears and short-term concerns that TMC expressed.” Toyota Motor Corporation (TMC) is TSAM’s Japan-based parent company.
“TSAM is wholly committed to working with government nationally, regionally and locally (city) in order to successfully create a business roadmap to secure long-term interests,” it said.
The company’s plant in Prospection, south Durban employs about 7,200 people and emerged unscathed from the past week’s unrest. It manufactures the Hilux, Fortuner, HiAce and Corolla Quest models and is due in November 2021 to start manufacturing the Corolla Cross compact SUV. It also assembles Hino trucks.