Japanese truck and bakkie manufacturer Isuzu believes it can increase the scale of its SA subsidiary by 50% within two years and more than double it within six.
After slower-than-anticipated growth in the first five years of operation, the Japanese parent believes exports and local demand can turn Isuzu Motors SA into a leading local producer of commercial vehicles.
Though routinely described as one of SA’s seven high-volume vehicle manufacturers, Isuzu SA is a junior partner in the group. In 2023, the company’s Struandale vehicle assembly plant in Gqeberha built fewer than 30,000 vehicles — less than half its 70,000 capacity and less than 5% of the industry’s total 633,332 production. However, since Isuzu does not build cars, a more accurate gauge of its scale is the 262,646 light commercial vehicles — mainly bakkies — built by the industry in SA last year.
Isuzu’s main product is the D-Max bakkie, though the company is a leading player in the relatively low-volume market for bigger trucks. For many years, D-Max was built on contract locally by General Motors SA. When it disinvested at the end of 2017, Isuzu Japan bought its operations to spearhead anticipated growth into the rest of Africa.
Konstantin Kriegelsteiner, the group’s global head of corporate strategy, told Business Day this growth had not met expectations. This, in turn, had reduced demand for the Struandale plant. However, Isuzu SA MD Billy Tom said the situation was changing.
Like other SA-based motor companies, Isuzu was not only looking for more African sales but also planning to expand its vehicle assembly footprint across the continent. In the short to medium term, Struandale would export D-Max kits for assembly in regional centres such as Kenya, Ghana and Ethiopia. Other countries keen to contribute to the development of a pan-African motor industry could offer alternative services. Ivory Coast, for example, might be considered for assembly of Isuzu trucks.
Annual new-vehicle sales in Africa are barely 1-million, with SA accounting for more than half. Proponents of a pan-African industry believe the 1-million could grow to 3-million by 2035 if plans for the continental free-trade area come to fruition and most countries agree to stem the flood of used, dumped vehicles from other markets.
While Tom and Kriegelsteiner both expect Isuzu SA to benefit from these changes, they aren’t putting all their export eggs in the African basket. Tom said discussions were also under way to export D-Max to South America.
He said: “It’s probably three to four years away.” By then, he hopes annual D-Max exports from Struandale to Africa, now just more than 7,000, will be at least 10,000.
He also has ambitious plans for the local market. He wants D-Max to grow its share of SA bakkie sales to 24% from below 20% now. That is an ambitious target in a market dominated in recent years by the Toyota Hilux and Ford Ranger. The influx of Chinese brands, plus imminent plans for Peugeot bakkies to be built in Gqeberha, won’t make it any easier.
The problem, said Tom, was that D-Max bakkies were widely perceived as strong, reliable, workhorse vehicles, while their lifestyle credentials, particularly in double-cab versions, were less obvious. “We’re seen as functional, rather than sexy,” he said.
Kriegelsteiner said a new global marketing campaign, with a strong local angle, aimed to rectify this. “Just having a good product doesn’t cut it any more,” he said. “You have to get the message out there.”
If all these plans come to fruition, Tom hopes annual Struandale production will rise to 45,000 by 2026 and close to the plant’s 70,000 capacity by 2030. That would require moving from the current single-shift production to at least a double shift.
One thing that won’t change for now is the engine technology. Struandale vehicles will be aimed squarely at customers for whom the transition to electric vehicles (EVs) is not yet feasible. Kriegelsteiner expected petrol and diesel internal combustion engines (ICE) to dominate the African bakkie market for at least another 20 years.
“Africa will offer a soft landing for ICE technology,” he said. “Even some developed markets that are moving to EVs are slowing or backtracking on their transition timetables. You can’t just set a date; you have to look at a country’s total energy management needs. There will be applications where the transition timetable doesn’t make sense.
“In Africa, that transition will take a long time. Equally, we believe in customer choice. If there is demand for EVs, we will be ready.”
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