Toyota South Africa Motors (TSAM) recently hosted a special visit from Hiroki Nakajima, Executive Vice President for Toyota Motor Corporation (TMC), in which a new Global and Regional Policy was announced.
The event in Durban was a special occasion in that TSAM was the first affiliate outside of Japan to receive this regional visit following the organisational changes and policy announcement by new TMC President, Koji Sato, on 7 April 2023.
Accompanying Nakajima to deliver the message was Toshimitsu Imai, CEO of TMC Africa Region and Executive Vice President of the Toyota Tsusho Corporation (TTC); and Shinichiro Otsuka, Chief Operating Officer for TTC Africa Region, who shared how the direction would work in Africa.
Finally, Andrew Kirby, President and CEO of TSAM, elaborated on how the company would adapt to and embrace the new direction going forward.
Electrification, Intelligence and Diversification
Nakajima, the former Chief Engineer for Hilux who is no stranger to South Africa, introduced the three key pillars of the Toyota Mobility Concept: Electrification, Diversification, and Intelligence.
The new management structure is centred around virtues of “inheritance” and “evolution”, with inheritance meaning carrying over the most important values of “Let’s make ever-better cars” and “Best-in-town carmaker”.
Based on these values, and responding to the unique needs of each region, Toyota focuses on providing high-quality cars under the leadership of regional CEOs.
“The Mobility Society vision was developed to enhance the value of the car, expand freedom of mobility, and provide new services and energy solutions as part of the Toyota Mobility Concept,” said Nakajima.
“We remain firmly committed to our multi-pathway approach and will continue to tailor electrification to the needs of customers and individual regions by drawing on the strengths and characteristics of each vehicle type.”
In practical terms, the first pillar of the Toyota mobility concept is a commitment to achieving carbon neutrality (CN) globally by 2050, with key milestones along the way being a 33% reduction of CO2 emissions by 2030 and 50% by 2035.
TMC is accelerating Battery Electric Vehicle (BEV) expansion worldwide and is aiming for ten new BEV models by 2026, which would amount to 1.5 million vehicle sales per year.
For Plug-In Hybrid Electric Vehicles (PHEVs), by increasing battery efficiency to extend the EV-mode driving range beyond 200 km, the company will reposition PHEVs as the “practical BEV”.
For Hybrids (HEVs), Toyota will continue to improve its product offering with a focus on quality and affordable prices, by accounting for local energy conditions and customer ease of use.
Toyota will also pursue mass production of commercial vehicles powered by hydrogen and has added the exploration of carbon-neutral fuels as a sixth element to its multi-pathway approach.
Pillar two of the Toyota Mobility Concept is the new generation of Intelligent cars that will evolve with advanced safety technology, multimedia, and feature updates.
An onboard operating system for next-generation BEVs will enable users to customise driving feel according to their preferences.
Next is the public rollout of intelligent services that connect cars to cities and infrastructure. For example, logistics systems that use real-time traffic information to boost transport efficiency, and systems that provide optimal energy management.
Then there is the role of intelligence in society. The Woven City, which Toyota positions as a “mobility test course”, will serve as a living laboratory for trialling various ways of connecting people, cars, and society.
The third pillar is Diversification. Toyota will not only diversify its services into connected technology, parts/accessories, and business collaborations with new partners, but also explore new types of energy.
Toyota has already begun work in Japan and Thailand on using hydrogen made from water, disposed foods and other waste, as well as carbon-neutral fuels made from biomass and other resources.
Carbon Neutrality in Africa
Imai then took to the stage of the Durban auditorium to reveal how CO2 reduction will be tackled in Africa.
“Our chairman, Akio Toyoda, said ‘Let’s make ever better cars’ when he became CEO of Toyota in 2009. New CEO, Sato-san said, ‘Let’s change the future of cars.’ Here we can clearly see ‘Inheritance’ and ‘Evolution’,” said Imai.
“We at Toyota Africa are responsible for mass-producing happiness in Africa. There are 54 countries in Africa, each with a unique environment, market and policy to consider. Therefore, with the philosophy of leaving no one behind in Africa, Toyota believes HEV is the best immediate solution for CN, considering the existing infrastructure.”
HEV’s are the most practical solution in Africa as the energy and electricity situation of each country must be considered.
Even in South Africa, the main energy source is still fossil fuels, and the electricity supply is not stable; therefore, BEVs are not a practical solution yet.
Also, in Africa, vehicles act as a lifeline where there is limited infrastructure.
In such an environment, Toyota believes HEVs are the most practical solution for CN in Africa.
They don’t take electricity from the grid, they can reduce CO2 emissions by 40%, make use of existing petrol stations, and are more affordable than BEVs.
To that end, TSAM will promote HEV by introducing competitive products in both the Toyota and Lexus stables.
From a local production point of view, TSAM will expand the production volume of Corolla Cross Hybrid derivatives.
New Energy Vehicles (NEVs) currently make up 3% of TSAM sales in South Africa, and the goal is to increase this to 22,000 units (10%) by 2025 and 54 000 units (20%) by 2030.
Such measures will ensure a CO2 reduction in line with TMC’s global CN initiatives. A gradual introduction of PHEV, FCEV and BEV will then follow, concluded Imai.
Region-centred approach
TTC’s Otsuka then spoke to the regional approach of the Toyota Mobility Concept with the provision of products for Africa fulfilling two key factors.
Vehicles that “protect people’s lifelines” – such as the Hilux and Land Cruiser range – and “affordable entry-level cars”.
“As part of TTC’s ‘Industrialisation in Africa’ pillar, Durban will be positioned as a ‘mother factory’ to the rest of the continent, where parts and vehicle distribution can be further expanded into Sub-Saharan Africa,” confirmed Otsuka.
Moving to the next level, stronger together
The milestone event in Durban was concluded by Andrew Kirby, President and CEO of TSAM, who provided a South African context to the new Global Management Policy.
“To tie to the themes of ‘Inheritance’ and ‘Evolution,’ and following extensive strategy planning and learnings from the 2022 flood recovery, we understand that selling vehicles is no longer business as usual,” said Kirby.
“TSAM recognises the risks, opportunities, and challenges on the continent due to global automotive disruptions, and we realise the need to strengthen our foundations and step up business reforms.”
“We have further identified the need to accelerate three key areas as mentioned by Nakajima, Imai and Otsuka,” said Kirby.
“They are our CN initiatives, the relentless pursuit of the right products for all our customers and positive regional impact.”
“Whilst we appreciate that the last three years have enabled TSAM to strengthen its foundations, we are inspired by TMC’s new guiding principles of ‘inheritance’ and ‘evolution’ and recognise that there is a lot more work to be done to accelerate change,” concluded Kirby.
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