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Toyota Hybrids manufactured in South Africa
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Toyota Hybrids Manufactured In South Africa & The Economics Behind It

Last night, President Cyril Ramaphosa announced in his State of the Nation Address (SONA) that the first generation of Toyota hybrids will be manufactured in South Africa. But what does that mean for our economy?

News that Toyota would be manufactured in South Africa has actually been in the headlines for months now, with Tech Central reporting that Toyota hybrids would be manufactured in South Africa in July last year. President and CEO of Toyota South Africa, Andrew Kirby, confirmed that the Japanese automotive giant would be producing and selling a new model, the Corolla Cross, in South Africa two weeks ago.

“The investment will also generate over 1,500 new jobs, of which 500 will be found in our plant here in Prospecton,” Kirby said, according to Reuters.

This all falls under the new “Corolla strategy”, a plan to invest R32.4 billion in building the passanger car, which “would be fashioned especially for its Africa consumers serving both right-handed and left-handed drivers,” according to VenturesAfrica.

More than half a million cars are produced in South Africa every year and, even though power outages and other mitigating factors have hurt the automotive industry, it still employs more than 112,000 people (and another 320,000 further down the value chain). It contributes towards as much as 6.9% of the National GDP, while manufacturing and retail contribute 4.4% and 2.5% respectively.

Furthermore, there are over 30,000 parts put into the manufacturing of Toyotas and it will have a ripple effect on other parts of the supply chain. Over and above this, South Africa has an abundance of natural resources such as iron ore, platinum, manganese, chromium, copper, uranium, silver, beryllium, and titanium, which means that the import costs typically associated with manufacturing these vehicles will be greatly reduced.

On the consumer side of things, a locally manufactured vehicle will be significantly cheaper, giving more South Africans access to modes of transport that they previously didn’t have. It would also cut the fuel costs of driving. Transport costs for many South Africans who live on the outskirts of urban hubs often serve as a massive barrier to employment opportunities and hampers economic productivity. Affordable private transport could have countless economic benefits. And it goes without saying that, even at the higher end of the market, the environmental benefits of current car owners making the switch to more affordable hybrids will be innumerable.

While this is all still in the motion, there’s no telling whether Toyota hybrids will be manufactured in South Africa without any significant speed bumbs or roadblocks. But, when it comes to the plan at hand and the economic benefits that could follow, South Africans could have a lot to be incredibly optimistic about.

For more stories about environmental issues and sustainable solutions, visit our Going Green section.

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