Low Rand Entices Toyota South Africa To Consider SA Engine Parts Factory

JOHANNESBURG November 28, 2002; Antony Sguazzin writing for Bloomberg News reported that Toyota Motor Corp., is considering establishing a factory in South Africa to manufacture aluminum engine parts.

The plant, which would be built near Pretoria, could initially produce as many as 200,000 cylinder blocks and engine heads for small vehicles, Toyota South Africa said in an e-mailed statement. It didn't say how much the plant would cost and when it may be built.

Building the factory would allow Toyota to take advantage of aluminum that BHP Billiton Group, the world's biggest miner, produces in South Africa. Toyota South Africa plans to more than double annual production capacity to more than 200,000 vehicles by 2007. The rand's average 12 percent annual decline since 1987 has cut production costs.

"South Africa currently exports substantial quantities of aluminum in ingot form," said Bert Wessels, Toyota South Africa's chairman. "It would make sense to add value and export finished aluminum products ourselves."

Toyota also may produce air bags and other car parts in South Africa, he said.

By 2007 Toyota the company plans to sell as many as 80,000 of the vehicles it produces in South Africa locally and export 112,000 units. The company's South African unit plans to begin exporting 15,000 Corolla models a year to Australia in March.