Toyota last week announced that it is in the process of setting up a new component manufacturing facility in Durban, KwaZulu-Natal in partnership with Ogihara South Africa.
The facility will supply a range of parts for Toyota vehicles assembled on local soil, including rocker panels, radiator supports, sills, roof rails, body pillars, and rear floor cross parts – all of which are currently imported.
This announcement holds potentially exciting news for future customers of the brand.
Sourcing parts from a domestic supplier that is only set up to serve one client will mean that Toyota should spend much less on importing and storing these vital components.
No longer will it have to work the cost of exorbitant import tariffs, long lead times, and high stock levels for these parts into the asking prices of its vehicles.
Should the company feel so inclined, this cost savings can be passed on to the consumer through lower vehicle prices.
At present, Toyota assembles five different vehicles at its Durban manufacturing hub, including the evergreen Hilux, Corolla Cross, Corolla Quest, Fortuner, and Hiace Ses’fikile.
Now we don’t expect to see the window sticker of the Hilux dropping immediately as soon as the new component factory is up and running in July 2025.
Toyota will have to recoup its R1.1-billion investment one way or another, and reducing its margins won’t be an effective way of doing so.
However, in the long run, the localisation efforts should contribute to less severe price hikes, which will make Toyota cars even more competitively positioned in the market than they already are. A good thing for you and me, but not for its rivals, so we might see some of them follow suit in the not-so-distant future.
The parts facility will also raise Toyota South Africa’s local procurement ratio by 2%, translating to an estimated R700 million in annual spend, as well as create approximately 250 new jobs by 2026.
Additionally, it will contribute to an increase of 25,000 tons in locally procured steel a year, directly bolstering another important sector of the South African economy.
Next-gen Hilux
It’s widely expected that the new component manufacturing plant is being set up to support the production of the next-generation Toyota Hilux and by extension, the Fortuner, with the grand opening scheduled for July 2025 lending credence to this idea.
It has been reported that the new Hilux, which like the current one will be built in Durban, will be unveiled in late 2025 before hitting public roads in the early months of 2026.
The bakkie is set to receive a host of updates ranging from upgraded architecture and a variety of new-energy powertrains, to a larger shell and a more sophisticated cabin.
Toyota likely did its calculations and found that the enhancements would have significantly raised the Hilux’s asking price, motivating it to seek ways in which it could reduce costs.
Incentivised by the South African Automotive Masterplan – which aims for South Africa to manufacture 1% of global vehicle production a year by 2035 – the Japanese automaker presumably decided that increasing its local procurement ratio would be one way to trim the fat, and thus, the idea of a new parts manufacturing facility was born.
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