1 16 October 2017 Bronwyn Kilpatrick VP Finance

1 16 October 2017 Bronwyn Kilpatrick VP Finance & Exports Toyota South Africa Motors

2 TSAM EXPORTS PRODUCTS

Light Commercial Vehicle Exports Hilux Single Cab Hilux Double Cab Hilux Xtra Cab 3

SUV & Passenger Vehicle Exports Fortuner Corolla Quest 4

5 AFRICA EXPORTS DESTINATION

Exports Distribution Countries Africa Exports 43 African Countries Biggest Markets v Ghana v Ethiopia v Zambia v Cameroon Africa Products 6

7 EXPORTS MARKET SITUATION

8 SUB-SAHARA AFRICA: New Car Market (`000 Units) 300 � 45% 250 200 150 100 205 187 226 238 244 258 204 161 142 50 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 FC q The market decline is due to forex supply restrictions, commodity prices; market stagnation; Government Policy changes; Regulatory changes etc.

9 SUCCESSES AND CHALLENGES

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 10

SUCCESSES for Exports into Africa 2. Geographical Location Benefit 9 480 Km 13 110 Km 12 850 Km 5 110 Km 10 500 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. 11

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

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

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

CHALLENGES for Exports into Africa 15 3. Not All SADC members are Participating in the SADC FTA 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. • 33% of SADC Countries are participating in the SADC FTA. • Results in high cost for motor vehicle in the non-participating countries

CHALLENGES for Exports into Africa 16 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. New Vehicle Grey Imports § These vehicles are not developed for harsh Africa Continent.

17 CONCLUSION

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

19 THANK YOU