Essay About Toyota Sa And Largest Vehicle Manufacturer

Outline of Toyota Motor Corporation South Africa
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Outline of Toyota Motor Corporation South Africa
Toyota Motor Corporation South Africa was formed as an independent company in
South Africa in May 1961(Toyota SA, Sustainability Report 2010). Toyota SA is the
largest vehicle manufacturer on the African Continent, and the largest exporter of
vehicles in South Africa. (Toyota SA, Sustainability Report 2010)
Toyota Motor Corporation South Africa became a fully owned subsidiary of Toyota
Motor Corporation in 2008. (Toyota SA, Sustainability Report 2010). The company
employers 7934 employees. Its manufacturing plant is situated in Prospecton which is
15 km outside Durban in Kwazulu Natal. It has a marketing office, & a parts
distribution centre in Johannesburg. The sales and marketing department provides
support to all dealerships in South & Southern Africa. The Durban plant manufactures
the Corolla, Fortuner, Dyna, Hilux & Hino vehicle models. Toyota motor vehicles are
sold and marketed through 184 dealers throughout South Africa and supports a further
22 dealers in Botswana, Lesotho, Namibia and Swaziland. The company is the largest
exporter of built up Toyota vehicles in South Africa, with these vehicles being sold in
80 countries worldwide. (Toyota SA, Sustainability Report 2010)
The Prospecton plant in Durban is fully integrated with Toyota Motor Corporations
production network, which has the latest manufacturing technologies, production and
quality assurance systems.(Toyota SA, Sustainability Report 2010) It is ideally
situated being on the east coast and in close proximity to the Durban harbour, King
Shaka airport and the National freeways.
Toyota SA also supports the development of many businesses. It has more than 50
manufacturers that supply components to the motor assembly plant. These
manufacturers in turn have several secondary individual component suppliers.
Toyota South Africas vision is to be globally competitive and its plan to achieve this
is through, domestic market leadership, being a reliable supplier of quality products to
the global supply network and a profitable organization that is able to fund future
growth. . (www.toyota.co.za Toyota SA, Sustainability Report 2010).
Shortcomings of Toyota SA & the Market
Since 1980, Toyota has been the market leader in South Africa with its Corolla and
Hilux range. One of the cornerstones of its success has been the reliability of its
vehicles.
However from 2007 through to mid 2010, Toyota recorded a significant decrease in
its passenger market share. From the chart below provided by research group,
Response Group Trendline, it can be seen that Toyotas passenger market share (in
dark purple) decreasing from 23 % in to 2008 to 20% in 2009 and down to 18% in the
first six months of 2010 and most notably, that they are no longer market
leaders.(Carte, 2010)
(Response Group Trendline, 2010)
There are a few factors that may have influenced this decline and will be examined.
In 2009 Toyota Motor Corporation recalled 52546 Corolla, Auris & Verso vehicles
plus 216 Prius vehicles. (www.toyota.co.za Toyota SA, Sustainability Report 2010).
Toyota Motor Corporation South Africa also took precautionary measures to recall
these vehicles as part of a service campaign to correct a potentially faulty accelerator.
These recalls had the potential of damaging Toyotas reputation as reliable and quality
vehicle and goes against their world famous slogan, “Everything keeps going right
Toyota.” Toyota attributes the drop in sales in 2008 and 2009 to world financial
crisis. (www.toyota.co.za Toyota SA, Sustainability Report 2010).
According to Toyotas marketing head Andrew Kirby in an interview with
Moneyweb, he denied that Toyotas market decline was due to the vehicle recalls and
ascribed it to heavy competition in a declined market. He also ascribes the loss of
market share due to Toyotas absence from the cheap car (entry level) sub b category
and the ageing of some of Toyotas biggest brands. According to Mr. Kirby, the
average list price of the Toyota passenger car offering was R250 000, which was
significantly more than most rivals (Carte, 2010).
The most notable decline for Toyota has been in the entry level car segments, due the
number of competitors in this segment having increased to compete with the Toyota
Yaris. Some examples are the Ford Fiesta and Ikon, Mazda 2, Hyundai I10, Renault
Sandero, Suzuki Swift and Volkwagens Polo Vivo.
Toyotas commercial, bakkies and trucks and growing exports has however allowed
them to remain the biggest player in the total vehicle market.( Carte, 2010)
Volkwagens Polo Vivo, which replaced the Citi