CAPE TOWN – Trade and Industry Minister Ebrahim Patel has launched a taxi manufacturing expansion plant in Durban, KwaZulu-Natal, to the tune of half a billion rand, the department said on Monday.
The plant expansion is part of the Toyota South Africa Motors (TSAM) Hiace Ses’filikile Plant.
Patel said the investment of almost R500 million is another vote of confidence in the capability of the South African automotive industry and the KwaZulu-Natal economy.
“Manufacturing is the largest contributor to economic output in the province, supporting more than 350,000 direct jobs,” he said.
Patel encouraged the automotive industry to prioritise the local production of vehicles in line with the automotive master plan and to look at electric and hybrid vehicles in future expansion plans.
“Last year, government and stakeholders adopted an automotive master plan, aiming to achieve 1 percent of global vehicle production by 2035, increase from current 600,000 units to almost 1.4 million units a year and increase Iocal content from the current 39 percent to 60 percent.
“The master plan is targeting to double employment in the value chain from current levels to about 240,000 and also to achieve at least level 4 BEE status from 2021,” Patel said.
The minister indicated that localisation must be a driver of development and opportunity, noting that localisation builds a country's manufacturing footprint.
Since TSAM’s localisation programme began, Patel said more than 80,000 taxis have been assembled locally by Toyota and by another smaller assembler.
“The increased level of local content is an important part of the vision for the industry and will increase the participation of more South Africans in this thriving sector of the economy.
"It is also a practical implementation of the commitment Toyota made at the investment conference last year," he said.
TSAM and chief executive, Andrew Kirby said in terms of the South African automotive masterplan (SAAM), local automotive value addition needs to be exponentially increased.
Kirby said that TSAM is committed to supporting the SAAM, and has therefore proactively increased the local value addition of the Hiace Ses’fikile from 38 percent to 44 percent.
“This localisation has added R422 million per annum local value addition to the economy. Even more encouraging is the fact that we’ve been able to create an additional 80 jobs in the process,” Kirby said.
Kirby also announced the start of the company’s export operations to support local assembly in Kenya of Hilux.
"TSAM is embracing the direction of local assembly, and has therefore invested close to R20 million for the establishment of our packing plant to support this knock down business.
"Start of production in Kenya will be later in October 2019 and customers in Kenya will benefit by being able to buy their vehicles at a more competitive price," Kirby said.
KwaZulu-Natal MEC for Economic Development, Tourism and Environmental Affairs, Nomusa Dube-Ncube, said plans were underway to develop an automotive supplier park in the south of Durban.
Dube-Ncube said the environmental impact assessment (EIA) on the site has been completed, adding that the provincial government is committed to ensuring that local communities are beneficiaries of the supplier park.