{"id":799724,"date":"2024-11-14T17:00:00","date_gmt":"2024-11-14T15:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=799724"},"modified":"2024-11-14T16:01:48","modified_gmt":"2024-11-14T14:01:48","slug":"toyota-sends-a-warning-to-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/motoring\/799724\/toyota-sends-a-warning-to-south-africa\/","title":{"rendered":"Toyota sends a warning to South Africa"},"content":{"rendered":"\n

Suben Moodley, Vice President for Corporate Services at Toyota South Africa, has stressed the urgent need for South Africa to adapt to the global shift toward new energy vehicles (NEVs).<\/p>\n\n\n\n

Speaking at the KwaZulu-Natal Investment Conference in Durban, Moodley stressed that the country must act decisively to secure its place in the evolving automotive industry. <\/p>\n\n\n\n

He highlighted<\/a> the need for South Africa to capitalise on its abundant raw materials essential for NEVs and to bolster its vehicle export capabilities, particularly across the African continent.<\/p>\n\n\n\n

The global automotive landscape is undergoing rapid transformation, as evidenced by the exponential growth in NEV sales. <\/p>\n\n\n\n

In recent years, NEV sales have surged\u201453% in 2021, 54% in 2022, and 35% in 2023\u2014culminating in 14.2 million units sold worldwide. <\/p>\n\n\n\n

Despite this growth, forecasts suggest that the pace will slow to around 10% in the coming years, making it even more critical for South Africa to position itself as a competitive player in the market. <\/p>\n\n\n\n

Currently, NEVs account for 15.7% of global new vehicle sales, underscoring their growing importance.<\/p>\n\n\n\n

South Africa, as Africa\u2019s largest vehicle producer, manufactured 633,000 vehicles in 2023, representing only 0.67% of global production. <\/p>\n\n\n\n

This figure falls significantly short of the industry\u2019s master plan target of producing one million vehicles annually by 2035 to achieve 1% of global production. <\/p>\n\n\n\n

Moodley pointed out that Africa remains an underdeveloped market in terms of vehicle ownership, with only 4% of the population owning vehicles compared to much higher rates in developed nations. <\/p>\n\n\n\n

This disparity presents an enormous opportunity for South Africa to expand its footprint by leveraging the African Continental Free Trade Area (AfCFTA). <\/p>\n\n\n\n

Despite Africa\u2019s 14.5% growth in vehicle production in 2023, South Africa exported fewer than 13,000 vehicles to the continent, leaving a vast untapped market.<\/p>\n\n\n\n

Moodley also emphasised the importance of local beneficiation of critical minerals such as lithium, nickel, and cobalt, which are abundant in South Africa and other African nations. <\/p>\n\n\n\n

These materials are vital for NEV production, and their local processing could significantly enhance the country’s value chain and economic prospects. <\/p>\n\n\n

\n
\"\"<\/a>
Toyota South Africa\u2019s Vice-President for Corporate Services, Suben Moodley<\/em>.<\/figcaption><\/figure><\/div>\n\n\n

Additionally, Moodley advocated for a balanced approach to decarbonisation, suggesting that hydro-electric vehicles could serve as a practical and affordable alternative to battery electric vehicles, especially in regions with limited infrastructure.<\/p>\n\n\n\n

To achieve these goals, Moodley called for a collaborative effort between the public and private sectors, supported by strong policy frameworks. <\/p>\n\n\n\n

He argued that reshaping the automotive industry to attract investment and localise NEV production would unlock substantial economic and job-creation opportunities. <\/p>\n\n\n\n

However, he also warned that South Africa risks being left behind as global markets transition to NEVs, particularly as the European Union implements stricter environmental regulations and targets a ban on internal combustion engine (ICE) vehicles by 2035.<\/p>\n\n\n\n

The automotive industry\u2019s hesitancy to embrace NEVs is concerning. <\/p>\n\n\n\n

Analysts have compared this reluctance to the failures of once-dominant companies like Kodak and Nokia, which were ultimately eclipsed by competitors due to their inability to adapt to technological advancements. <\/p>\n\n\n\n

Without proactive measures, South Africa\u2019s automotive industry risks losing its relevance in key export markets, jeopardising its long-term sustainability.<\/p>\n\n\n\n

Recent data from Naamsa, the Automotive Business Council, underscores these challenges. <\/p>\n\n\n\n

While domestic vehicle sales showed modest growth in October 2024\u201447,942 units sold, a 5.5% increase compared to the same month in 2023\u2014exports painted a grimmer picture. <\/p>\n\n\n\n

Vehicle exports plummeted by 42.6%, with only 23,342 units shipped in October 2024, compared to 40,666 units in the same period the previous year. <\/p>\n\n\n\n

Cumulatively, vehicle exports for the first ten months of 2024 were 23.1% lower than in 2023. <\/p>\n\n\n\n

This sharp decline reflects deeper structural issues, including the European Union\u2019s stringent emissions regulations and the influx of competitively priced Chinese electric vehicles into the European market.<\/p>\n\n\n\n

Mikel Mabasa, CEO of Naamsa, noted that these factors are reshaping the industry\u2019s dynamics, creating additional pressures on South Africa\u2019s ICE vehicle exports. <\/p>\n\n\n\n

As global markets increasingly adopt NEVs, South Africa\u2019s current approach appears insufficient to maintain its share in critical markets.<\/p>\n\n\n\n

Toyota\u2019s warning to South Africa is clear: adapt to the changing automotive landscape and benefit significantly or face major economic consequences. <\/p>\n\n\n\n

By prioritising the beneficiation of raw materials, expanding exports to African markets, and embracing NEV technologies, South Africa has an opportunity to remain a relevant and competitive player. <\/p>\n\n\n\n

Failure to act, however, could see the country\u2019s automotive industry lose its footing in an increasingly electrified world.<\/p>\n\n\n\n

\n\n\n\n

Read: BMW and Mercedes under siege in South Africa<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Toyota South Africa\u2019s Vice-President for Corporate Services has delivered a sobering yet urgent message to South Africa.<\/p>\n","protected":false},"author":92,"featured_media":799746,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11119],"tags":[21005,21006,853,2041],"class_list":["post-799724","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-motoring","tag-new-energy-vehicles-nevs","tag-oems","tag-south-africa","tag-toyota"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/799724","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/92"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=799724"}],"version-history":[{"count":5,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/799724\/revisions"}],"predecessor-version":[{"id":799747,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/799724\/revisions\/799747"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/799746"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=799724"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=799724"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=799724"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}