Toyota: Still going right — for now

As South African vehicle manufacturers cry foul over growing market infiltration by Chinese brands, one company has so far appeared immune to their spread. In 2025, Toyota South Africa Motors (TSAM) accounted for 24.8% of new vehicle sales.

In an aggregate market of 596,818 new cars and commercial vehicles, it racked up 148,124, its highest total since 2007. The company, whose brands include Toyota and Lexus cars and Hino trucks, has enjoyed 46 years of unbroken market leadership since 1980.

But can it remain so dominant in a market turned upside down by low-priced imports? While China is considered the main threat, India is also a growing source of products. Many of these, however, are imported by South African manufacturers, including TSAM, to supplement local vehicle ranges. Proposed protection against imports could have a damaging effect on these companies.

Leon Theron, TSAM senior vice-president sales & marketing, says its brands thrive because customers know what they are getting: vehicle quality, durability and reliability, allied to good after-sales service and resale values. He says: “In times when every purchase decision matters, many South Africans choose brands that offer consistency and peace of mind.”

They can choose from a range of vehicles across the price and specifications spectrum. Between the little Toyota Vitz (starting price R181,000) and Lexus LX (R2.7m), there are Starlets, Urban Cruisers, Rumions, Supras, Hiluxes, Corollas, Fortuners, Land Cruisers, HiAces, Quantums and a variety of upmarket Lexuses.

Then there’s TSAM’s dominance of the new energy vehicle (NEV) market which, in South Africa, means electric vehicles. In 2025, despite a flood of Chinese entrants, Toyota and Lexus had a combined 58% market share of NEV sales.

Theron expects this share to grow in 2026 as TSAM introduces new NEVs. Unlike some global manufacturers, which are concentrating on fully electric, plug-in vehicles, Toyota and Lexus continue to develop hybrid technologies, which combine electric power with traditional petrol and diesel internal combustion engines.

TSAM expects the overall new-vehicle market to grow 5.5% in 2026, to 630,000. But with Chinese brands forecast to increase their share — to the point that Beijing-based BAIC already has a plant here, Chery is preparing for local manufacture and others are considering it — long-standing manufacturers may see their dwindling production shrink further.

Several have lost significant market share to the invaders, particularly in the past four years. So, can TSAM remain as immune to the new order as it appears to have done so far?

Industry sales in the first quarter of 2026 increased by 12.4% from a year earlier. TSAM’s grew by just more than 5%. As a result, its year-on-year market share fell from 24.7% to 23.1%. Three months’ results are not a trend, but the numbers do underscore the intensifying market challenge in an overcrowded market.

In 2025, despite a flood of Chinese entrants, Toyota and Lexus had a combined 58% market share of new energy vehicle sales

In 2025, South African-made vehicles accounted for 33% of local sales of cars and light commercial vehicles (bakkies, minibus taxis and vans). The remaining 67% were imports, primarily from India and China. The local share is expected to shrink further this year. So while the market is booming, local manufacturers are struggling. Nissan is about to halt South African manufacture, while other companies have cut production. Thousands of jobs have been lost in vehicle and components manufacturing, and many more are at risk.

Local companies have accused some importers of dumping vehicles — selling them for less than they cost to manufacture — in South Africa. Whatever the truth, there is no denying that Chinese and Indian companies building vehicles by the million in their home countries have much lower unit costs than South African plants which, in some cases, produce fewer than 50,000 a year.

Nevertheless, the government says it may consider antidumping measures against Chinese and Indian products through higher import duties. It has also been asked to stop importers buying duty credits from local vehicle manufacturers. These credits, called production rebate certificates (PRCs), allow manufacturers to reduce duties on vehicles they import. Some, however, earn many more PRCs than they need and unused ones, worth billions of rand, are sold on the market, mainly to independent importers.

TSAM is also in the market for PRCs. The company’s Prospecton assembly plant in eThekwini makes the Hilux bakkie, Fortuner SUV, Corolla Cross car and HiAce minibus, as well as Hinos. Unlike some competitors, which export most of the vehicles they build, TSAM production is focused mainly on the domestic market. Still, last year it exported more than 71,000 vehicles.

Theron says Prospecton accounts for about half the light vehicles Toyota sells in South Africa. India is a significant source for the rest. It is a production base for Suzuki, which builds a number of models both for itself and Toyota. The seven-seater Toyota Rumion is a rebadged and modified Suzuki Ertiga. Other examples include the Toyota Vitz (Suzuki Celerio), Starlet (Baleno) and Urban Cruiser (Vitara Brezza).

It has been suggested that the government’s automotive production and development programme (APDP) should allow manufacturers with surplus PRCs to absorb the value directly into their production cost structure to reduce prices. If not, Theron believes they should be offered first to other local manufacturers. “Only once those needs are met, should credits flow to pure importers,” he says. “This approach maintains the integrity of the APDP and ensures it continues to incentivise local manufacturing investment, which is essential for the sector’s long‑term sustainability.”

Given TSAM’s need for India-sourced vehicles, he is understandably cautious about talk of antidumping measures against imports. He concedes it is one way to redress the market imbalance between local and imported vehicles (TSAM president and CEO Andrew Kirby has suggested the local share needs to recover to at least 40% and preferably closer to 50%), but at what cost to Toyota and others, such as Volkswagen, that also source vehicles from India?

The APDP has a history of unintended consequences. “It is a complex environment with many market factors to be considered,” says Theron.