Into Africa: Toyota taps last emerging market

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Into Africa: Toyota last emerging market


April 14, 2014 8:35 am ET

TOKYO — year, former Toyota Corp. president and founding patriarch Shoichiro Toyoda aside his son, Akio

He had a mission for the automaker’s current Get out of the Asia-Europe-America rut and visit places you never been.

So that’s what the younger Toyoda He visited Kenya for the first last fall, touring knockdown production plant and Group companies.

The visit was a example of the Toyota maxim of genbutsu, which literally actual place, actual but is best translated as go to the source to see for

His trip highlights a new reality for and rivals from Europe to Africa is the last untapped market. And carmakers are jostling for there.

The potential is huge motorization in Africa has yet to take

In South Africa, there roughly 160 vehicles per 1,000 according to 2009 data by IHS Automotive. But in Kenya and Nigeria two of the most populous countries in — there are fewer 40 per 1,000.

The problem: Cashing in on big will take awhile.

on 2030

IHS predicts sub-Saharan gross domestic product per won’t reach $3,000, and its rate won’t reach 70 per 1,000 people, until That was a critical turning reached by China in 2012.

For now, the African auto essentially means South which accounts for half the 1.3 million new-vehicle sales, to IHS.

The country is Toyota’s point. Toyota has been the leader in South Africa for 34 and has an assembly plant there annual capacity to make vehicles.

Newly appointed CEO Johan van Zyl, a native African, brims with about the continent’s potential. a growing market, a market a future, van Zyl said.

He expects sales there to climb 8 to 271,000 in 2014. Next Toyota is launching the Quest, tailored to South African It is a tweaked, lower-cost version of the generation Corolla.

Aside from its South plant, Toyota also has knockdown production sites in and Kenya, each with for just 3,000 vehicles. Its sellers are the Hilux pickup, Cruiser SUV and Corolla small

Scouting locations

Van Zyl is scouting locations in northern Africa to expand Toyota’s production

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But first, the company has to fully its South Africa plant, is operating below full at just 160,000 vehicles. the Africa-oriented Quest should

Van Zyl cites Hyundai Motor Co. and AG as Toyota’s biggest rivals in But Chinese brands, such as and Great Wall, increasingly see as a beachhead for overseas expansion. In years, the Chinese government has millions of dollars in aid into the primarily in countries with oil

African production should hit 1.1 units in 2020, from shy of 800,000 last year, IHS But the main growth will from South Africa and Renault Group is positioning the as an export hub to Europe.

To be sure, huge population and big potential for growth are tempting to many But the continent is still the ultimate game.

New-car sales are paltry. Angola, which has 20 million people, buys around 30,000 new cars a according to IHS.

Ghana, with about 25 people, buys only new vehicles a year. And in Cameroon, a member of the 20-million population automakers sell a meager

While continentwide production of 1.1 million vehicles in six years may encouraging, consider this: produced 1.76 million last year in North

‘Ambitious target’

We have an ambitious target, van Zyl said of Africa sales goals, declining to give a specific

But we must also understand, is not going to happen overnight, he We have to put the right things in And that is what we are busy to ensure that we have the foundation for the business in the future in

You can reach Hans Greimel at . — Follow Hans on


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