Isuzu intends to use South Africa as a production center for trucks in Africa
The president of the South African division of Japanese manufacturer Isuzu Motors (7202.T) stated on Friday that the company’s new tab intends to serve as the African market’s commercial truck manufacturing center, assisting in the expansion of volumes and locally sourced parts.
Isuzu Motors South Africa’s president and CEO, Billy Tom, told Reuters that he has been discussing the concept with Japan.
“We’re telling them that you have a facility in Africa rather than in Japan where they make cars. “We can manufacture the cars here,” Tom remarked.
According to Tom, Isuzu has successfully tested producing a truck and its body locally. It imports a portion of its truck bodies from nations including China and the Middle East.
The company’s South African facility imports the Isuzu MU-X SUV for distribution in African markets, builds medium-heavy and extra-heavy commercial trucks, and produces Isuzu D-MAX pickup trucks.
Although it exports its pickups to over 30 African nations, it sends very few trucks to the rest of Africa.
“So we’ve targeted West Africa as a starting point and then we’ll see how it goes,” Tom explained.
“We have been searching for business prospects in Africa. Fifteen percent of my volumes were in Africa around six years ago. Now, it’s between 22% and 23%. Our goal is to raise that percentage to 45%.
Although less than half of the member states actively trade under the framework of zero tariffs, Tom hopes to benefit from the African Continental Free Trade Area, which was established in 2021 and recognized by 49 nations.
As the surge of imports, particularly from China, threatens the local industry, the big seven automakers that manufacture in South Africa—VW (VOWG.DE), opens new tab; Toyota (7203.T); and Mercedes-Benz (MBGn.DE)—are searching for ways to protect their production volumes.
At a symposium on auto parts earlier this week, Minister Parks Tau informed participants that South Africa’s automotive masterplan, which aims to have 60% local content by 2035, had stalled at 39%.
Additionally, the plan is for South Africa to produce between 1.3 and 1.5 million automobiles by 2035, up from the current average of 600,000.
“That threat of deindustrialization is there and probably getting bigger as well, because if you look at the growth of what is imported into the country, that number is growing,” said Tom.
Tau has stated that his department will investigate the effects of automobile imports on domestic production through the nation’s international trade administration body, as approximately 64% of all automobiles sold in the country are imports.
