While he observed a 1% decline in the sub-B and A-segment compact arena, Kirby said that the loss translated into a gain in C-segment sales as buyers sought larger vehicles.
In the A and B-segment markets, Toyota fields the Vitz, Starlet and Urban Cruiser, products that share identities with Suzuki models.
“[There was] a significant increase in extra heavy commercial vehicles, reflective of the transport and logistics environment with challenges on rail,” he said, anticipating that the category would continue playing a substantial role in keeping the economy moving.
Kirby reiterated that 42% of all vehicles sold in the country are sourced from India, with 24% being produced domestically.
“In new energy vehicles (NEV), there was a 65% increase in sales compared to 2022, the total volumes are still fairly small, but the trajectory is interesting, the biggest increase was seen in plug-in hybrids.”
He believes that the opportunity lies in vehicles that can be priced competitively for mass adoption in the lower segments.
Thabo Manaka, CEO of Toyota Financial Services South Africa, was next to speak.
“The biggest challenge that we face in the vehicle finance space is affordability. That affordability is impacted by vehicle inflation [that] does not correlate with normal inflation, which results in vehicles being more and more expensive,” he said.
According to Manaka, this impacts buying patterns and replacement cycles as customers tend to hold on longer to vehicles.
He is of the view that consumers will remain under pressure for a while. "This economy requires a lot of momentum to stir up the market into customers going back to dealerships."
Manaka believes that the first part of 2024 will be flat, with an uptick expected in the second half. The prospect of general elections also impacts certainty, he said.
Leon Theron, senior vice president of sales and marketing at Toyota, said that consumers in our market still prefer traditional finance and cash purchasing methods.
However, he claimed that buyers were also opened to different options such as the Kinto One leasing programme offered by the brand.
Theron said the offering had been particularly successful in the business space, forecasting an increased uptake among private consumers as time progressed.
“What makes Kinto One good is that it's a complete package – maintenance, roadside assistance and insurance,” he said, in addition to punting the flexibility and tailor-made aspects for specific requirements.
Commenting on Toyota’s sales performance in 2023, Theron was proud of the brand’s achievement despite market difficulties.
“[About] 142,000 units is our second highest volume since 2007, quite remarkable in a market that turned on us in the second quarter, this is the highest market share we have ever put on the table – 26.8% – again, in a tough market.
“We achieved a 16% share in the compact passenger segment [Starlet, Urban Cruiser, Vitz and Rumion]; in the C-segment, Corolla Cross has a 39% market share,” he said. The Fortuner has a 51% share of its market.
Japanese brand maintains leadership in weak economy
Toyota SA stays on top despite tough market
Image: Supplied
Toyota South Africa Motors CEO Andrew Kirby conceded to missing the mark in his total new vehicle market sales prediction for 2023.
From a brand-specific standpoint, however, the company trumpeted its achievement of 44 consecutive years of local market leadership, selling approximately 10,000 more units in 2023 (142,612 units) than it did in 2022.
Kirby addressed the media last week at the seventh instalment of the annual State of the Motor Industry conference hosted by the manufacturer. As in previous years, investigative journalist Devi Sankaree Govender lent her sharp presenting style to proceedings, on MC duty.
In January last year, Kirby made the prediction that the South African new vehicle market would register as many as 570,000 new units.
According to Naamsa, the national automotive business council, the 2023 sales year ended off on 532,098 units, representing 0.5% growth versus the 529,556 units sold in 2022.
"Historically, we have always been a lot more accurate, so I’ll admit that this one we got wrong, we didn’t quite forecast on the changes that we experienced as a country," said Kirby.
"In the first quarter of 2023 we were still on track for 570,000 units, we saw a significant change in May, then in August we ended up with a fairly soft market, all the way through the end of the year," the CEO explained.
He cited high interest rates, inflationary pressures, increased load shedding, as well as logistic challenges related to the rail and ports networks, as reasons for the decline.
Unpacking the market further, Kirby noted that significant growth was seen in the light commercial vehicles sector, as well as the B and C-segment markets. In these regards, Toyota owes the majority of its sustained volumes to the popularity of the Hilux and Corolla Cross.
Image: Supplied
While he observed a 1% decline in the sub-B and A-segment compact arena, Kirby said that the loss translated into a gain in C-segment sales as buyers sought larger vehicles.
In the A and B-segment markets, Toyota fields the Vitz, Starlet and Urban Cruiser, products that share identities with Suzuki models.
“[There was] a significant increase in extra heavy commercial vehicles, reflective of the transport and logistics environment with challenges on rail,” he said, anticipating that the category would continue playing a substantial role in keeping the economy moving.
Kirby reiterated that 42% of all vehicles sold in the country are sourced from India, with 24% being produced domestically.
“In new energy vehicles (NEV), there was a 65% increase in sales compared to 2022, the total volumes are still fairly small, but the trajectory is interesting, the biggest increase was seen in plug-in hybrids.”
He believes that the opportunity lies in vehicles that can be priced competitively for mass adoption in the lower segments.
Thabo Manaka, CEO of Toyota Financial Services South Africa, was next to speak.
“The biggest challenge that we face in the vehicle finance space is affordability. That affordability is impacted by vehicle inflation [that] does not correlate with normal inflation, which results in vehicles being more and more expensive,” he said.
According to Manaka, this impacts buying patterns and replacement cycles as customers tend to hold on longer to vehicles.
He is of the view that consumers will remain under pressure for a while. "This economy requires a lot of momentum to stir up the market into customers going back to dealerships."
Manaka believes that the first part of 2024 will be flat, with an uptick expected in the second half. The prospect of general elections also impacts certainty, he said.
Leon Theron, senior vice president of sales and marketing at Toyota, said that consumers in our market still prefer traditional finance and cash purchasing methods.
However, he claimed that buyers were also opened to different options such as the Kinto One leasing programme offered by the brand.
Theron said the offering had been particularly successful in the business space, forecasting an increased uptake among private consumers as time progressed.
“What makes Kinto One good is that it's a complete package – maintenance, roadside assistance and insurance,” he said, in addition to punting the flexibility and tailor-made aspects for specific requirements.
Commenting on Toyota’s sales performance in 2023, Theron was proud of the brand’s achievement despite market difficulties.
“[About] 142,000 units is our second highest volume since 2007, quite remarkable in a market that turned on us in the second quarter, this is the highest market share we have ever put on the table – 26.8% – again, in a tough market.
“We achieved a 16% share in the compact passenger segment [Starlet, Urban Cruiser, Vitz and Rumion]; in the C-segment, Corolla Cross has a 39% market share,” he said. The Fortuner has a 51% share of its market.
Image: Supplied
“Hilux is quite incredible, 37,000 units sold last year is the second highest number that we’ve achieved in the history of Hilux in the country. The last number we achieved higher was in 2019 with 40,993 units.”
Meanwhile, the evergreen Hiace has a 96% market share.
On the Lexus front, Theron claimed that the luxury division recorded a 2.7% growth. "Lexus is starting to grow – we never said we wanted to be a volume brand – it is a niche market."
Asked how it was possible that Toyota maintained its stronghold in SA for so long, Kirby attributed success to the consistent release of quality products in addition to building a relationship of trust with local consumers.
And what about the total new vehicle market forecast for 2024?
“We are conservative, we think we will get to 540,000 – analytically, that is where our number comes out,” Kirby concluded.
NEW MODELS COMING FROM TOYOTA IN 2024:
– Land Cruiser 70-Series (February)
– Hilux mild hybrid (March)
– Hilux GR-S (March)
– Land Cruiser Prado (April)
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