Toyota South Africa Motors (TSAM) expects its sales to drop by as much as 10% in July because of the unrest and looting in KwaZulu-Natal.
This follows the closure of TSAM’s manufacturing operations in Prospecton in Durban, which was forced to close for eight days from July 12 until July 20 because of fears about the safety of its employees and the security and safety of the plant.
Toshimitsu Imai, the chief operating officer Africa region for Toyota Tsusho Corporation and general manager Africa support division for Toyota Motor Corporation (TMC), said the closure of the N3 to Gauteng meant that TSAM was unable to deliver vehicles to customers in Gauteng for several days.
In a letter sent to the City of eThekwini Mayor, Mxolisi Kaunda, late last week, Imai said the incidents in the city “have left us feeling uncertain about the future of our business in KZN”.
Imai added that the closure of the plant jeopardised TSAM’s future sustainability as the company embarked on its recovery following the COVID-19 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.
“Built up vehicles destined for the export markets also cannot be shipped owing to the closure of the port,” he said.
TSAM confirmed there was no damage to the plant or any equipment during the unrest and looting, and production at the plant resumed on July 20. A TSAM spokesperson was unable to comment on whether the disruption to production at the Durban plant and ports will result in any vehicle stock shortages in South Africa.
Imai further highlighted in the letter to the eThekwini Mayor that TSAM is in the final stretch of preparing for the launch of its first locally produced new energy vehicle this year.
He 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 [TSAM] risk missing key deadlines and the opportunity to challenge for other new products.
“While the local management team has been working closely with the leadership of the City, they were unable to provide us with any clear direction/plans on how the City intended bringing stability and order back to the City,” he said.
TSAM subsequently clarified its position, stressing the aim of the letter to the Mayor’s office was to voice concern over the future risk of conducting business in KwaZulu-Natal and to understand what local and provincial government were doing to address long-term stability issues.
TSAM said that since issuing the letter, there had been positive engagement with national government, in particular, which has gone a long way to allay the fears and short-term concerns that TMC expressed.
“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.
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