CMH states that production has been decreasing for at least 12 weeks

Toyota South Africa Motors’ (TSAM) large Prospecton manufacturing plant, south of Durban, “will be shut down” for a minimum of 12 weeks due to damage to the facility following the recent floods in KwaZulu-Natal, says a vehicle dealer listed on JSE Holding combined engines (CMH).

CMH CEO Jebb McIntosh made the comment during a presentation on CMH’s latest annual financial results, released this week.

“The Toyota plant is down, we believe, for a minimum of 12 weeks,” he said.

“This will take a big chunk out of the South African market because they are the largest supplier….

“Retailers will have no stock of those particular models for the next 16 weeks because if they are out of service for 12 weeks, it will take four weeks to replenish the stock,” explained McIntosh.

The “particular models” McIntosh referred to are Hilux, Corolla Cross, Quest, Fortuner and Hiace Ses’fikile, all produced locally at the Prospecton plant.

Production at the plant was suspended from 11 April 2022.

Metair Investments, a major TSAM supplier, last week declined a Moneyweb request for an interview about the impact of the production suspension at the Toyota plant on its operations. However, on Thursday morning Metair issued a The statement of Sen in relation to the impact of the floods of the KZN.

He confirmed that he has now initiated a request for a business interruption to limit the impact on Metair’s Automotive
The component vertical gains due to the floods and impact on a major original equipment manufacturer (OEM), without naming TSAM.

“Although the impact on Metair’s facilities was minimal and operations promptly returned to normal, a major OEM customer warned from the group that they suffered significant damage to their facility with production suspended for remediation and assessments to be made.” he said he said.

“There is still no certainty about the turnaround times for in-line production, but Metair’s Automotive Components Vertical predicts a material reduction in demand for its products by then.”

“Metair has insurance in place and has initiated a business interruption request that would limit the impact on Automotive Components Vertical’s earnings,” the group added.

“Metair will also work with affected OEMs to support their resumption and any recovery of lost production … Metair is in close contact with its lenders to maintain sufficient short-term liquidity until the situation stabilizes,” he said. underlined.

Moneyweb reported earlier this week that a senior executive at a local-based vehicle manufacturer says production at the Toyota plant will only resume in about four months, following extensive flood damage.

The executive, who did not want to be named, said the floods caused an estimated Rs 2.8 billion in damage to the TSAM plant.

TSAM did not respond directly to a request from Moneyweb to confirm or deny these claims and a number of other questions.

TSAM on Friday indicated that it is still unable to confirm when production will resume at its facility.

An aerial view showing the April floods at Toyota South Africa’s Prospecton plant, south of Durban. Image – Association of Automobile Industry Personnel (Misa) .jpg

The auto giant said it is currently implementing a systematic and meticulous plan to get its prospecting plant back to working order after suffering extensive flood damage in April. He noted that this approach is designed to ensure a safe boot, with no potential secondary problems.

The company added that remediation operations are progressing at a pace in several areas, with the first three phases including:

  • The establishment of temporary users at the plant,
  • Clean up, e
  • Turn on the machinery.

TSAM said that once the test power-up phase is reached, certain areas of the facility will then be able to move on to phase four, which involves a thorough evaluation and inspection of the equipment.

Andrew Kirby, President and CEO of TSAM, said that only once this phase has begun will he “be able to adequately judge the realistic lead time to resume production”.

“As you can imagine, there will be a mountain of repairs to be made along with many parts that need to be ordered. It would therefore be irresponsible of us to set a launch date until we have the full picture, “Kirby added.

“We expect firming updates within the next week,” he said.

This article first appeared on Moneyweb and has been republished with permission.
Read the original article here.

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