Less than half of the auto industry suppliers in South Africa meet Toyota’s requirements, the South Africa Automotive Conference was told.
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The two biggest shortcomings are preventative maintenance and thorough problem analysis capability, Henry Pretorius, senior vice president product development and purchasing for Toyota South Africa said.
The company has a 20-point checklist on which 80% is the minimum score. Only 47% of suppliers currently meet that. “But we expect all to be above 80% this year,” he said.
Independently-owned suppliers without global ties will not easily survive, he added.
The number of unique local suppliers to Toyota is forecast to fall from 37 in 2000 to 20 by 2007. “Many more Japanese suppliers are looking to come here – but will they come as partners of local companies or alone?”.
Toyota’s preferred route was for suppliers to have a global link which is more than just a technical agreement. “We are committed to localisation which, frankly, we don’t think all manufacturers are.”
One of the problems with technical agreements is that they can add cost, are not fully supported and have restrictive sales conditions. “Joint ventures are our preferred route because they have commitment, costs are down and there is export potential and good transfer of technology,” said Pretorius.
New model launches were now taking place in SA within four to six months of launch in Japan so it was imperative for local suppliers to win business at the “front loading” stage and to be part of the early “global sourcing solution.”
Marc Lowe, director of manufacturing for Nissan South Africa warned suppliers to keep careful control of costs because he was being urged by Japan to decrease local content.
“It is actually becoming cheaper to source some components from Japan because costs are increasing in South Africa. Wage increases are running at a higher level than inflation and that means manufacturing costs increase.
“We would all like to source 100% locally but that does not necessarily make you competitive, you have to strike the right balance between locally and externally sourced parts.”
