Kwa-Zulu Natal, 22 August 2024 – In a landmark move for the South African automotive industry, Toyota Tsusho Africa (TTAF), a subsidiary of Toyota Tsusho Corporation, has announced a new joint venture with Ogihara (Thailand) Corporation (OTC) and Toyota South Africa Motors (TSAM). The joint venture, named Ogihara South Africa (OSA), was unveiled at a groundbreaking ceremony held at the Dube Trade Port in Durban.
The event was attended by high-profile dignitaries, including Minister Parks Tau from the Department of Trade, Industry and Competition (DTIC). During his keynote address, Minister Tau emphasized the critical role of the automotive industry in South Africa’s economic strategy, particularly under the South African Automotive Masterplan (SAAM) 2021-2035. “The Department is focused on implementing and enhancing Masterplans to boost key industries, attract investment, create jobs, and drive transformation. Specifically, the automotive masterplan aims to make South Africa’s automotive industry globally competitive and sustainable, benefiting both industry stakeholders and society at large,” Tau stated.
The partnership involves a substantial R1.1 billion investment into the production of key manufacturing components, with TSAM contributing R545 million and the TTAF-Ogihara joint venture adding R630 million. This strategic investment is set to significantly bolster the South African automotive sector by localizing the production of essential components, a move that aligns with the broader objectives of SAAM.
Andrew Kirby, CEO and President of Toyota South Africa Motors, highlighted the importance of this collaboration in strengthening local manufacturing capabilities. “This joint venture marks a significant step towards our Local Value Addition (LVA) improvement strategy, by localizing the production of these critical components. The inclusion of Ogihara SA in our local manufacturing ecosystem will not only create new job opportunities but will also enhance our capabilities in producing high-quality body parts for the automotive industry,” Kirby remarked.
The venture’s impact is poised to be profound. According to Statistics South Africa (Stats SA), the country’s unemployment rate has reached 32.9% in the first quarter of 2024. With the SAAM’s ambitious target of manufacturing 1.4 million vehicles annually by 2035, the creation of new jobs in the automotive sector is crucial. The Ogihara South Africa joint venture is expected to create 250 new jobs by 2026, contributing significantly to the sector’s employment goals.
Furthermore, the joint venture will enhance TSAM’s local procurement ratio by 2%, which translates to an estimated R700 million in annual local spending. This initiative is a crucial step toward reducing reliance on imported parts, with plans to phase in the sourcing of additional local press parts. This shift is expected to increase the annual procurement of locally produced steel by 25,000 tons, further boosting the local economy.
Scheduled to commence production in July 2025, the Ogihara South Africa facility will focus on manufacturing small to medium stamped parts for TSAM. This strategic move is not just about boosting local production; it’s about transforming the landscape of the South African automotive industry, ensuring it remains globally competitive while fostering economic growth and job creation in the Kwa-Zulu Natal region.
In conclusion, the establishment of Ogihara South Africa marks a significant milestone in the South African automotive industry’s journey towards greater localization and global competitiveness. This joint venture not only aligns with the objectives of the SAAM but also represents a significant investment in the future of South Africa’s economy, contributing to job creation, industrial growth, and economic transformation.
