by NAACAM | Aug 31, 2018 | Latest News

Toyota drives deeper localisation – champions transformation while doing so

Toyota South Africa Motors (Toyota) hosted its second imported parts exhibition of 2018 at its head office in Durban on 14 August.

This exhibition focused on driving deeper localisation – aiming to reduce the imported content within the parts Toyota procures from its first-tier suppliers. Over 30 Toyota first tier suppliers exhibited 600 parts that they currently import or that have significant imported content. “We worked with suppliers to identify parts that we jointly believe could be produced locally, at globally competitive prices and to the quality standards demanded by Toyota and its customers” Theo Govender, Senior Purchasing Manager, Toyota. “We have a model change in just a few years so these opportunities are ideal for new suppliers to develop the competencies and gain the experience required so they can quote and grow when further opportunities arise”.

Kim Nisbet, Senior Manager Enterprise and Supplier development added; “This deeper localisation opportunity needs to be used as a catalyst for the development of small businesses. To this end, we have invited small black businesses that have the capability, albeit with some development, to manufacture parts at a Tier 2 and 3 level. We are looking to the Tier 1 suppliers to identify suitable suppliers for their imported parts and then lead this supplier development.”

Nonceba Biyela, Enterprise and Supplier Development Manager at Toyota, in her welcome mentioned that over 40 Black-owned small business were present, who would have an opportunity to bid for parts to potentially supply to Toyota in the future. She also noted that, although some parts were more suited for current T1 suppliers that this should be viewed as an opportunity for Black Supplier Development as well. She closed by saying that Toyota recognises the significant barriers that face suppliers in the automotive sector and therefore invited many support entities and organisations which suppliers could network with and to understand what support may be available.

South Africa has not got a deep supplier base, and this needs to be developed if the South African Automotive Masterplan objectives are to be achieved. Between 2020 and 2035 its aims include to transform the sector, double its employment and grow local content levels from the current 35-40%% to 60%.

“Toyota has embarked on multiple programmes to support the SA Automotive Masterplan objectives. The imported parts exhibitions are one. We held our first on 21 June, focused on wider localisation – aiming to reduce Toyota’s direct imports. We displayed 800 parts and received 1400 expressions of interest so are positive about the potential of this parts display methodology. A second programme is our partnership with first-tier suppliers who we have each challenged to support the development of a black-owned supplier in 2018. This is already showing positive results.” Michael Waldburger, General Manager of Purchasing at Toyota.

Sabelo Sibanda, CEO of Printed Circuit Board manufacturer, Millbug travelled from Port Elizabeth to the event. He was visibly excited at attending “It is much more than a talk-shop. Today showed clear actionable opportunities for Tier 2 and 3 suppliers.”

Shilpa Mehta, MD of Durban based Production Logix, agreed with Sibanda, noting that “Toyota’s exhibition approach to localisation opportunities allows suppliers to view parts and determine whether or not we have the necessary capabilities before embarking on the quoting process. Management, especially of smaller firms can’t afford the time to chase dead ends”.

Sugeshnee Naidoo is Director of Enermous Investments, a BBBEE Level 1 Pietermaritzburg based foam tape manufacturer is new to the sector. Enermous is being supported by Smith Manufacturing as part of Toyota’s black-owned supplier development challenge. “The opportunities in the automotive sector are vast, and it’s exciting to see Toyota’s approach to localisation and the way they are tying this to the development of local black-owned suppliers”.

Renai Moothilal, Executive Director of the National Association of Automobile Component and Allied Manufacturers (NAACAM), observed that “Toyota’s increased focus on an innovative, practical approach to localisation is a great example to others on how to drive deep localisation through the value chain”. Moothilal noted that “it is crucial for South African OEMs and large Tier 1s to find sources for localisation, particularly as the demand on local value-add levels rises post-2020 and linking this to transformation opportunities”.

 

For more information please contact the Durban Automotive Cluster’s facilitation team on (031) 7646100 or dac@bmanalysts.com

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