Toyota South Africa Motors 16 October 2017 Bronwyn Kilpatrick VP Finance & Exports Toyota South Africa Motors

TSAM EXPORTS PRODUCTS

Light Commercial Vehicle Exports Hilux Single Cab Hilux Double Cab Hilux Xtra Cab

SUV & Passenger Vehicle Exports Fortuner Corolla Quest

AFRICA EXPORTS DESTINATION

Exports Distribution Countries Africa Exports 43 African Countries Biggest Markets Ghana Ethiopia Zambia Cameroon Africa Products

EXPORTS MARKET SITUATION

SUB-SAHARA AFRICA: New Car Market 45% The market decline is due to forex supply restrictions, commodity prices; market stagnation; Government Policy changes; Regulatory changes etc.

SUCCESSES AND CHALLENGES

Strong Local Based Partners 10 SUCCESSES for Exports into Africa 1. Mobility to Africa (Strong Local Based Partners) Transforming mobility in the continent. Strong Local Based Partners West Africa East & S. Africa Ghana & Gabon

SUCCESSES for Exports into Africa 11 SUCCESSES for Exports into Africa 2. Geographical Location Benefit 9 480 Km 13 110 Km 12 850 Km 10 500 Km 5 110 Km Strategic location in the coast allows TSAM to reach markets in Africa quicker compared to competitors. Distance to Central/East Africa is much shorter.

SUCCESSES for Exports into Africa 12 SUCCESSES for Exports into Africa 3. Beneficial Free Trade Agreements Five member states are currently participating in the SADC FTA. These member states accounts for 11% of TSAM Exports into Africa. FTA expands trade volume among member countries.

CHALLENGES for Exports into Africa 13 CHALLENGES for Exports into Africa 1. Availability of Finance (For New Vehicles) VS + - x / 1 2 3 Affordability Find a car Apply for Finance Banking/Finance for Individual/Private is weak-to-non existent. 4 5 6 Finance Approved Get Insured Get Your Car

CHALLENGES for Exports into Africa 14 CHALLENGES for Exports into Africa 2. Regulatory & Industrial Policy Challenges Government Regulatory & Industrial Policy Challenges Customs Tax & Duty System Automotive Industry Regulations Infrastructure Developments (Forex Pressure impacts industrialisation) Weak to unstable policies by many countries. Duties & Taxes can exceed 250% in some countries.

CHALLENGES for Exports into Africa 15 CHALLENGES for Exports into Africa 3. Not All SADC members are Participating in the SADC FTA 33% of SADC Countries are participating in the SADC FTA. Results in high cost for motor vehicle in the non-participating countries Although there are FTA with many countries in Southern Africa, however the Industrial Policies do not necessarily offer any protection against importation of second hand vehicles.

Second Hand Grey Imports New Vehicle Grey Imports 16 CHALLENGES for Exports into Africa 4. Grey Imports Challenges (New & Used Cars) Second Hand Grey Imports Grey market occupies 30% of Total Sub-Sahara Market. Many countries have no regulation of second hand vehicles (mainly grey vehicles). Import origin - mainly Japan, USA and Middle East. These vehicles are not developed for harsh Africa Continent. New Vehicle Grey Imports

CONCLUSION

GETTING AFRICA INTO GEAR 18 GETTING AFRICA INTO GEAR Overcome the over-reliance on second-hand vehicle imports Africa vision designed and implemented in partnership with industry stakeholders. Address insufficient vehicle finance options for new vehicles. Encourage SADC member states to participate in the SADC FTA. Design and implement an automotive policy that enables competitive operating environment. Duty-free access to large export markets is beneficial to the consumer. Import tariffs or age restrictions on used vehicles aimed at stimulating demand for new vehicles. Regulation of grey market in partnership with industry stakeholders Africa Growth is inconsistent, uncertain and timing is also unknown. This makes investment decisions more difficult.

THANK YOU