30 Years of Market Leadership for Toyota

Toyota South Africa ended 2009 with a market share of 23% for the year. The company’s share of the market peaked at 26,3% in March, the highest penetration seen in the past two years and followed this up with a 25,9% share in December. Toyota’s total domestic sales in 2009 were 90 701 units in a total market of 395 230 vehicles.

“As South Africa felt the full impact of the global financial crisis during 2009 and saw total vehicle sales drop of sharply from the 533 387 units of 2008 to 395 230 units for 2009, a decrease of 25,9%,” says Johan van Zyl, the President and CEO of Toyota SA. The last time the South African Motor industry experienced this level of trade was in 2003 when 381 456 vehicles were sold.

“Going into the fourth quarter of 2009 we suggested that the industry could break through the 400 000 mark for the year. That forecast came within a slim margin of being realised and we believe that 400 000 was the real potential of the market for the year and was only impeded by distortions in reporting typically seen in December and January.

“Looking ahead, we see the potential for slow growth in the industry off this relatively low base through 2010. We will be looking for an improvement in sales of at least 5% if we fully realise the bonanza offered by the excitement generated by the soccer world cup. Our volume forecast going into the new year is 415 000.

“While South Africa certainly felt the impact of the global recession, prudent fiscal management in previous years provided a degree of insulation that saw us somewhat better off than a number of more developed countries. While this may have lessened the impact on domestic sales, it could not protect the motor industry from the sharp drop of in export sales as global demand for vehicles collapsed.

“Aggressive economic support packages provided but these countries, including the various ‘cash for clunker’ programmes, provided a measure of support. This together with the first signs of emergence from the recession in developed countries provided welcome relief for our export market during the fourth quarter. October saw a significant increase in export sales when the monthly average of export deliveries rose by 50%, This improved further in November but the drop off in demand experienced through to September saw export sales for the year lag by 38% with 174 952 vehicles exported for the year.

“During December we saw sales of medium, heavy and extra heavy vehicles sustain the momentum first evidenced in September. This is encouraging as its reflects on a higher level of activity in the commercial and construction industries that will impact positively on confidence levels going into 2010.”

Through 2009 the star performer in Toyota’s market leading product line was the Hilux which ended 2009 on a high as the top selling vehicle in South Africa. Demand for this popular 1-ton pick-up saw sales of 2 933 units in December, a figure that eclipsed the total light commercial vehicle sales of Toyota’s nearest competitor in the LCV segment. In the passenger vehicle sector the Corolla was the top seller in December with sale of 1 178 units with the Fortuner providing support as the second most popular passenger vehicle for the month and by far South Africa’s most popular SUV 1 110 units for the month.

The sales success of these vehicles, based on a solid reputation of reliability, durability, overall value for money and low cost of operation that has seen Toyota lead the market in vehicle sales for the past 30 years in succession.

This extended term of market leadership is all the more remarkable as it has been achieved in a sector of the economy renowned for its cyclical nature. The motor industry is one that is easily influenced by volatility in the social and business environments but Toyota has stood the test of time in a rapidly changing South Africa, not only as a domestic supplier of vehicles but as a leading exported of vehicles as well.

The success of Toyota over the past 30 years is founded on a combination of forward thinking and the rigid application of a range of internal and external strategies. Toyota’s market philosophy has been formulated to ensure that a wide-ranging product line-up provides effective transport solutions together with the highest levels of customer support and satisfaction.

Since Toyota joined the South African market in 1961 as a company founded by Dr. Albert Wessels, a visionary industrialist, the company has grown into the leading manufacturer and marketer of vehicles on the African continent. Sales of Toyota vehicles in South Africa alone since the formation of the company exceed 3,27 million units. A wholly owned subsidiary of Toyota Motor Corporation since 2002, Toyota South Africa has been fully integrated into the Toyota global supply network with an annual production capacity of more than 200 000 vehicles with approximately half of that production aimed at export markets.

From the outset Toyota set about changing the outlook of the South African motorist by displaying that there were better efficiencies and customer support levels available in a market that up until then had been dominated by large American type vehicles with largely centralised distribution and service networks. Toyota took its effective transport solutions to the people with support in rural communities that had not been seen before. Today the company still has the widest and most stable dealer network in the country.

Toyota’s success was founded on its reputation as a supplier of light commercial vehicles with the 1,5 ton Stout an immediate success. This was followed by the smaller Tiara and Corona pick-ups, both derived from passenger vehicles, and the 2-ton Dyna. A significant breakthrough came with the introduction of the Hilux in 1969, a vehicle that proved to be just the right vehicle for South Africa at the time and has built on that success since then.

Toyota first entered the passenger vehicle market in 1975 with the Corolla. Again this was a vehicle that arrived in the local market at just the right time. The country, like many in the western world, was severely impacted by a global fuel crisis that would shape the motor industry through the decade of the 70s. Toyota was the first local company offer a compact, economic and comfortable vehicle solution as the market downscaled overnight.

It took just five years for the Corolla to place it stamp on the passenger vehicle market and together with the Hilux as the other core product in the range moved Toyota into a position of market leadership in 1980. Despite aggressive challenges from competitors and a fundamental change in the structure of the local motor industry over the past 10 years Toyota has remained the undisputed market leader in South Africa.

“Toyota has a proud record of providing the right product built to the highest quality standards and supported by a stable dealer network,” says Johan van Zyl. “These are the fundamentals of the positive ownership experience for which our brand is renowned and they will remain fundamental to the Toyota ownership experience going forward.

“Toyota has developed a tremendously loyal customer base over the years. I would like to take this opportunity to thank our customers for there support and ensure them that we will be there for them to ensure that they continue to enjoy the best possible ownership experience as can be expected from the market leader as we embrace the latest vehicle technologies to the advantage of the South African vehicle operator.”