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Toyota's South African unit sees 15-20% hit to production due to virus - Metro US

Toyota’s South African unit sees 15-20% hit to production due to virus

A logo of Toyota is pictured at Bangkok Auto Salon 2019 in Bangkok

JOHANNESBURG (Reuters) – The South African unit of Toyota <7203.T> could see its production drop by around 15-20% in 2020, its president and CEO Andrew Kirby said on Wednesday.

South Africa’s auto industry is the continent’s most developed, but with only a very small local market for new cars it relies heavily on global demand.

Kirby told a virtual media briefing that Toyota South Africa, which produces between 135,000 and 150,000 units per year, had seen an around 15% cut in export orders from its biggest market, Europe, as well as an around 10% cut in orders from Africa, which it expects to increase.

“I think by and large somewhere around the 15% and 20% mark is probably where it’s going to end up for the year,” he said when asked how production would be impacted in 2020, adding South African sales had also declined.

The division had already lost production of around 13,500 units due to a nationwide lockdown in the country, set to last five weeks, he said.

Sales stood at “basically zero” in April, senior vice president of sales and marketing Leon Theron added, noting the South African sales were expected to fall by at best 16% for the year.

South Africa considers the auto industry its most important manufacturing sector, and had been due to launch a 2035 plan to develop it in January 2021 with targets to double production and grow jobs. The sector is now discussing postponing its launch to July that year, Kirby said.

(Reporting by Emma Rumney; editing by Jason Neely and Louise Heavens)

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