Toyota not involved in R6.5-billion lawsuit against South African government

Toyota South Africa Motors (TSAM) is not directly involved in a brewing legal battle with various stakeholders in the KwaZulu-Natal provincial government.

Last week, Bloomberg reported that TSAM lodged a R.65-billion damage claim in the Durban High Court against Transnet SOC Ltd., the KwaZulu-Natal Department of Transport and eThekwini Municipality.

The claim is a response to the devastating floods that hit the province back in 2022, which caused severe damage to Toyota’s Prospecton factory on the outskirts of Durban.

However, Bloomberg later updated the article to clarify that TSAM did not file the lawsuit directly.

Instead, the suit was filed by the automaker’s Japanese insurance company, Tokio Marine & Nichido Fire Insurance.

The insurer alleges that the floods, which closed the Prospecton plant for four months, cost the company about R4.5 billion in plant repairs and rehabilitation and more than R2 billion in business interruption.

Toyota’s KZN factory produces the Hilux bakkie, Fortuner SUV, Corolla Cross SUV, HiAce minibus, and Hino Trucks, which are sold locally and exported to countries in Europe and Africa.

The floods wreaked havoc on the plant’s assembly lines and wrote off 88% of the finished vehicles on site, leading to an expensive cleanup and repair process.

Toyota has already claimed from its insurer for the disaster, and Tokio Marine is now filing a suit against those it considers responsible for the incident.

The damages claim, which includes interest on the quoted sum, alleges that by failing to maintain waterways and drainage systems that carried the floodwater, the three defendants shared responsibility for the damage.

TSAM has since issued a statement to clarify its position on the matter, insisting that the manufacturer is not directly involved and is not facilitating or financing the proceedings.

“Upon learning of the impending recovery litigation, TSAM undertook, with the consent of Tokio Marine, to engage with each of the defendants to advise of the impending subrogated recovery action,” said Tasneem Lorgat, General Manager, Marketing Communications at Toyota South Africa Motors.

Toyota also clarified that it would not benefit from the outcome of the action.

TSAM is listed as an appellant in the case, but the company has reiterated that it is not an active participant.

Department of Transport and Human Resources MEC, Siboniso Duma, confirmed that he met with TSAM’s President and CEO, Andrew Kirby.

“Over the years, we have worked well with Mr Kirby, Mr Nigel Ward – Executive Vice President, Manufacturing, and the entire Toyota family.  We have agreed that nothing should come between us and this enduring relationship,” said Duma.

“We do not doubt that the department that Toyota will continue to be the most preferred brand in the country,” he added.

Duma explained that the department is assembling a legal team to guide them through the lawsuit and cannot share any further legal technicalities of the process.

Steps to avoid another disaster

After the floods occurred in 2022, Toyota invested roughly R236 million to redesign its factory with the goal of preventing a similar catastrophe.

The automaker described its strategy as “three lines of defence,” which refers to city infrastructure, the peripherals of its factory, and the buildings themselves.

For the first line, Toyota collaborated with KZN authorities to reinstate the road to the plant and move the overhead cables underground, as both were completely washed away during the floods.

Secondly, the company spent R108 million to establish “proactive monitoring and maintenance systems” to prevent water ingress into the factory grounds.

This included installing a new early-warning weather monitoring system and building new canals and stormwater drains.

For the last line of defence, TSAM spent R128 million on 835 key interventions inside the facility to keep water away from its valuable infrastructure.

Examples of this includes new bund walls around its key buildings, and raising the entry doors further off the ground.

Vital equipment has also been raised 200mm off the ground so seeping liquids won’t reach it.