Toyota could lose 45 000 vehicles at Durban plant due to flood impact
Toyota South Africa Motors (TSAM) will likely end up losing around 45 000 units in production due to the impact recent flood damage at its manufacturing plant south of Durban.
All the vehicles that incurred damaged will be scrapped and crushed so that no potentially compromised Toyotas will ever make it into the retail chain. About 12% of the 4 596 units on site had no damage at all and can be sold.
According to CEO Andrew Kirby, the impact of the flooding has been a tremendous setback for the company.
“But we have extensive insurance coverage and are also fortunate that our parent company Toyota Motor Corporation (TMC) is supporting with all the cashflow challenges that we are likely to encounter,” Kirby said in a statement on Tuesday.
At the same time, Kirby sees a “silver lining” after being forced to cease operations at the plant when flooding caused extensive damage to the facility a month ago. A systematic phased plan is being implemented to return the Prospecton facility to working condition.
“TSAM is pleased to announce that it has resumed operations of its export line of Catalyc Convertors and will – in the next few days – open the Hino assembly line,” said Kirby.
It will, however, take some time for the main lines – such as Hilux, Fortuner, HiAce and Corolla Cross as well as Corolla Quest – to reopen.
“We’ve been through the process of cleaning, drying and flushing. And now, we are checking all of our equipment repairing, powering up the control panels and having to order replacement parts where necessary. We are at a point where it’s not easy to predict when we would be able to start-up,” said Kirby.
During the recent floods, the facility’s flood-protection measures were effective up to a point and will be reinstated and enhanced even further.

Question 1 (20 Marks)
Examine the financial and non-financial risks that Toyota South Africa is faced with due to the impact of the floods at its manufacturing plant south of Durban.

Question 2 (20 Marks)

Given the extended impact of flooding beyond Toyota South Africa, evaluate how the Sustainable Development Goals (SDGs) [SDG 3; SDG 4; SDG 6 and SDG 9] were impacted by the flooding disaster in Kwazulu Natal Province. (12 Marks)

Evaluate any TWO (2) risk mitigating strategies that the Kwazulu Natal Provincial Government may use to (8 Marks) reduce the severity of the impact of flooding in future

Question 3 (20 Marks)

It will, however, take some time for the main lines – such as Hilux, Fortuner, HiAce and Corolla Cross as well Quest – to reopen. as Corolla

Examine reputational risk in the context of Toyota (8 Marks)

Critically discuss the reputational risk management process for Toyota. (12 Marks)

Question 4 (20 Marks)

“But we have extensive insurance coverage and are also fortunate that our parent company Toyota Motor Corporation (TMC) is supporting with all the cashflow challenges that we are likely to encounter,” Kirby said in a statement on Tuesday.

Analyse and discuss ANY FOUR (4) variables of enterprise risk management that Toyota has to consider. (8 Marks)

Critically discuss the methods of risk identification that would ensure that all possible risks are identified by Toyota. (12 Marks)

Question 5 (20 Marks)

We’ve been through the process of cleaning, drying and flushing. And now, we are checking all of our equipment repairing, powering up the control panels and having to order replacement parts where necessary.

5.1 Compare and contrast loss prevention from loss reduction that Toyota could implement. (8 Marks)

5.2 As a Chief Risk Officer for Toyota, advise Toyota on the major parts of Integrated Risk Management (IRM). (12 Marks)

Answers to Above Questions on Toyota Case Study

Answer 1: An analysis of the given case study on Toyota South Africa indicates that the company faces both the financial as well as non-financial risks because of the recent flood at its manufacturing plant in Durban. The financial risks are mainly in the form of losses of production because of the flood, inventory losses, and disruption in the supply chain management of the company. The non-financial risks are mainly in the form of reputation damage, decline in the morale of employees because of a fear of losing jobs as a result of factory shutdown.