Toyota Has One Eye on Nigeria as Tariffs Rise

Toyota Motor Corporation of Japan is investigating the possibility of producing vehicles in Nigeria.
Johan van Zyl, the president and chief executive of Toyota South Africa Motors, confirmed this yesterday, adding that the investigation had been prompted by the imposition by Nigeria of higher tariffs on imports of new vehicles into the country.
Van Zyl said he could not comment on when any announcement would be made about possible vehicle production in Nigeria.
“The decision on whether we will invest in another country is not a Toyota South Africa decision, but a decision by Toyota Motor Corporation in Japan,” he stressed.
Ian Nicholls, the vice-president of operations at General Motors South Africa (GMSA), confirmed last week that the new regulations and much higher vehicle import duties in Nigeria meant automotive companies would need to do some level of assembly in Nigeria to compete effectively and GM would have to rethink its plans in that country.
Van Zyl said Nigeria was not a big market for new cars at this stage but it was a big country with a huge population and a big economy in Africa, which meant Toyota could not ignore it. He confirmed Toyota SA’s exports to the rest of the continent this year would be about 20 percent lower than last year, largely because of the higher tariffs introduced by Nigeria and Algeria.
Algeria had adjusted a support programme for entrepreneurs to purchase especially light commercial vehicles to focus more on housing.
There had also been an adjustment to import tariffs in Angola, he said. Van Zyl believed more emerging markets would start asking for manufacturing and the industrialisation of their economies, which was understandable.
“From a Toyota point of view we evaluate every opportunity and every country on its own merits in terms of whether it’s viable to produce there or not.”
Former trade and industry and public enterprises minister Alec Erwin was the technical adviser to the Nigeria Automotive Council and contributed to the creation of the strategic framework for the development of the Nigeria Automotive Industry Development Plan.
Trade and Industry Minister Rob Davies said last year that the government had been supporting Nigeria in the establishment of its own motor manufacturing industry because it supported industrialisation of the entire continent, and believed there were synergies and complementarities South Africa could benefit from if Nigeria developed a motor manufacturing industry. This included the supply from South Africa of semi-knocked down (SKD) vehicle kits.
Van Zyl did not believe the government’s support for Nigeria would undermine South Africa’s vehicle manufacturing industry and the objectives of the Automotive Production and Development Programme.
If the Nigerian government decided it wanted to establish a motor industry, it would do so with or without South Africa’s support, he said. He also did not believe the supply of SKD vehicle kits to Nigeria would undermine its own product, stressing the option was to either lose the volume completely or supply the kits.
“If the kits are produced here [South Africa] it’s still value that is created here and there is also value that is created there [Nigeria] from the assembly point of view so overall intra-Africa trade can be promoted on that basis.”
Source: BusinessReport

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