The annual Toyota State of the Motor Industry (SOMI) address almost feels like the first day back at school for those covering the business of new cars.
When the leading manufacturer by sales extends an invitation to hear detailed insights and market predictions and see exciting model previews – any motoring scribe worth their weight in hashtags knows they have to accept. This was the eighth installment of SOMI.
In contrast to previous years, the 2025 round seemed to have a smaller audience, with less fanfare and a more sombre tone overall. Expectedly, perhaps, given that the SA new car market dipped in 2024 with a 3% fall to 515,712 units.
Different mood
Even the hosts were different this time. The lively, terrier-like Devi Sankaree Govender (who has been there since the first SOMI) was replaced by Leanne Manas – reminding some of dreary Mondays with SABC 2's Morning Live in the background, while eating cereal. Toyota also decided to fly out superstar car content creator Rory Reid. He shared an amusing story about how the brand denied him his first press test car.
Going back to my notes for the 2024 round of SOMI, there was a greater sense of optimism, since the performance for 2023 indicated a 0.5% growth over the previous year: 532,098 versus 529,556.
As for this year? Toyota's post-event press release summed it up almost glibly, with a headline saying: “2025 – it could go either way”. You get the sense that if they could have put a nervous laughing emoji next to the title, they would have.
Despite a dip, Toyota is still the sales king
Still, the real substance of SOMI lies in the high-level overview. As in previous years, Toyota SA CEO Andrew Kirby served plenty to digest.
While Toyota enjoyed total market leadership in 2024, its share of 25% fell below the record-high of 26.8% recorded in 2023.
Among the reasons for the drop cited by Kirby, was a “structural change in the taxi industry” and fraud that resulted in the withdrawal of finance, leading to the shrinking of Hiace minibus sales. Toyota was also impacted by a 2.6% decline in the light commercial vehicle sector.
“And please do not ask if we are bringing in a half-ton bakkie – no, it is not in the plan,” the CEO said, dismissing speculation around the entry of the Hilux Champ sold abroad.
The CEO noted the most popular body styles in SA are B-segment, sub-B-segment, double-cab and C-segment vehicles.
He was encouraged by the sustained performance of the Hilux, as well as the Corolla Cross, which averaged a monthly volume of 1,822 units. According to Kirby, there remains a two-year waiting list for the Land Cruiser Prado attesting to its desirability.
Making educated guesses
Kirby predicts a 3.7% in new vehicle sales for 2025, with the final number being 535,000 units. “Ideally the number should be higher than 536,000 so we can exceed [the figure for] 2019,” he said.
A more significant figure wielded by Kirby is 600,000: he believes this is the optimal number the SA market needs to achieve, for the long-term sustainability of the local motor industry.
Achieving that will take some effort – and the road ahead is not without potholes. Kirby outlined four structural issues facing the sector.
SA's motor industry faces a slalom
First, according to the CEO, not much has been done to chase the aspirations outlined in the 2018 SA Automotive Masterplan, which provided a holistic view with targets around production volumes, employment, local content and transformation. However, Kirby was pleased by progress in regional market integration, with inroads towards alignments within the African Continental Free Trade Area (AfCFTA).
Next, he acknowledged market disruption from Chinese imports. “I am not suggesting we put import duties on Chinese vehicles – but we do need to find a way, as a country, to create a balanced environment in which we can all thrive.”
Criticism was expressed over SA's “incomplete” electric vehicle (EV) policy, a point which segued into the fourth concern: signs of early deindustrialisation in the country, indicated by diminishing sales of locally-built vehicles, compared to imports, which accounted for 60% in 2024.
Looking into the crystal ball
Five trends were shared by Kirby. Affordability pressures will continue to influence the market in 2025 – and beyond.
He observed that in 2024, the average selling price of new passenger vehicles declined, showing a buying-down trend. Although the Toyota Financial Services division was said to have seen an increase in the number of declined applications due to affordability, its pre-owned division reported an increase in sales.
Kirby forecasts an increase in the number of SUV and crossover models on sale in SA, as well as the shifting preference towards models that offer more engaging in-car connectivity functions.
“With voice activation, gesture control and even customised lighting – buyers are not so interested in 0-100km/h anymore, but the connectivity aspects.”
The fourth trend is the upward tick of Chinese and Indian vehicles, citing increasing global sales.
“If we look at the number of vehicles made locally, the figure has declined by 6.5%, this is fairly material. Indian-sourced vehicles increased by 79% over the last five years, making up 30% of all vehicles sold in SA. Chinese brands make up 10.5% of all vehicles sold in SA.”
The final trend noted was the transition to new energy vehicles (NEVs). But this topic seems to be tempered with concerns, in the local context.
According to Kirby, 70% of our motor industry exports go to Europe and the UK. However, changing emissions regulations in these markets may leave SA in a difficult position.
There is a glimmer of hope, with the CEO welcoming the announcement of support for zero-emission vehicle manufacturing, applicable to battery electric vehicles (BEVs) and fuel cell electric vehicles (FCEV).
“If you were to introduce a vehicle in SA, you get a 25% incentive, for BEV and FCEV, that has effectively increased to 35% through a tax mechanism.”
“The problem is we [Toyota] do not sell any of those vehicles in SA, so we don't have a home base, to be able to support attracting investments.”
“In most of the cases around the world, the decisions on investments in new models, is made on how it supports the local domestic market.”
“Of course, exports are an important aspect for us, helping us justify the investment, but we need to be able to grow our scale of NEV in SA, while protecting our exports.”
Friendly banter and fresh metal
Kirby was joined for a brief panel discussion, by Mikel Mabasa, CEO of Naamsa, SA's automotive business council and Greg Cress, the principal director for automotive and eMobility at Accenture.
Mabasa said he was aligned with Kirby's thinking – and optimism to surpass the 2019 new vehicle sales number.
“When we looked at 2024, we predicted it would be a year of two halves, the fourth quarter was encouraging, on the back of interest rate cuts – and if those are sustained into 2025 it will alleviate pressure on consumers,” he said.
The Naamsa head also praised the political stability of the country. “The May 2024 elections consolidated our 30-year democracy, while the GNU has given us hope.”
Cress commented about the importance for growth.
“We are selling new vehicles to the same customers, only 10-million South Africans out of 70-million can currently afford a new vehicle – this speaks volumes to the fact that the economy is strained.”
“We need to breakthrough into new growth areas, to uplift the ability of people to become employed, affording new vehicles.”
The reveal of imminent new models remained a highlight of this year's event.
During the same week, Toyota launched its facelifted Corolla Cross. Attendees were given a look at the spiffy Fortuner GR-S, upgraded GR Yaris (now with an automatic gearbox); Hilux Legend 55, Lexus LX700h and Lexus GX which are all confirmed for 2025 introduction.
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