Toyota SA plans to spend R3,5 billion in capital over the next five years to coincide with the export of 15 000 to 20 000 Corollas to Australia next year, Bert Wessels, the manufacturer’s executive chairman, said on Monday. Toyota Motor Corporation was also likely to become the majority shareholder of the company by the middle of this year.
Toyota SA plans to spend R3,5 billion in capital over the next five years to coincide with the export of 15 000 to 20 000 Corollas to Australia next year, Bert Wessels, the manufacturer’s executive chairman, said yesterday. Toyota Motor Corporation was also likely to become the majority shareholder of the company by the middle of this year.
Wessels said Toyota SA had already signed off capital expenditure of R1,1 billion this year for improvements to its Durban plant, most of which was allied to the introduction of the new Corolla.
"The main project is the new press line that introduces the capability for us to press a full passenger vehicle body side for the first time. This project alone accounts for R168 million. Also new is the investment in the manufacture of a hi-tech slush moulding process for dash panels. This accounts for R50 million," he said.
The emergence of SA as a low-cost manufacturing base could have an enormous effect on the local car industry, Wessels added. "In the past we have always said that our export projects will be driven by the MIDP (motor industry development programme). Today that is only partially true. SA has emerged as a low-cost manufacturing base (even before the most recent weakening of the rand) with a good manufacturing infrastructure.
"It’s not that our labour costs are low, but rather that the cost of land, facilities and services, as well as management costs, are low by international standards," said Wessels.
Wessels said the ambitious capital expenditure programme was indicative of the scope of the changes taking place at Toyota SA. He said Wesco, currently Toyota SA’s majority shareholder with a 64 per cent stake in the company, had indicated it would retain "a significant minority shareholding".
But Wessels would not comment on the exact shareholding that would be retained by Wesco, adding that this was still under negotiation. Japan’s Toyota Motor Corporation currently holds the remaining 36 per cent stake in the company.
The imminent changes to Toyota SA’s shareholding follows its share repurchase scheme and delisting from the JSE last year. The buyout of minority shareholders was a prerequisite for Toyota Motor Corporation to acquire a majority shareholding in Toyota SA, Business Report reported on Tuesday.
Toyota Motor Corporation also confirmed last year that by 2005 a new globally strategic model would be manufactured in South Africa for export to a number of destinations, including Europe.
Wessels said the next generation of Corolla, the company’s first volume export model, would have a local content of about 60 per cent “because of increased emphasis placed on developing new items for the local content basket”, the report said.