Toyota sees continued rise in vehicle demand

MANILA, Philippines - The local unit of Japanese automotive firm Toyota Motor Corp. is looking at what projects it can undertake to respond to the expected rise in demand for vehicles here.

In a statement, Toyota Motor Philippines Corp. (TMPC) president Michinobu Sugata said the strong vehicle sales seen in the first quarter shows that motorization in the Philippines has taken place and is becoming more evident as the economy continues to grow.

“We are now studying what and how TMPC should prepare for the possible surge in market demand, together with formulating our revised annual plan,” Sugata said.

Among the firm’s projects in the pipeline are increasing its production capacity through plant improvements, as well as localization of additional 15 press parts for the Vios.

Combined sales of the Chamber of Automotive Manufacturers of the Philippines, Inc. and Truck Manufacturers Association, Inc. climbed 23 percent to 51,643 units from 42,034 units in the comparable period a year ago.

Sales of the Association of Vehicle Importers and Distributors, Inc. meanwhile rose 13 percent to 9,055 units in the first quarter from the 7,990 units in the same period last year.

Aside from TMPC, the firm’s four suppliers are likewise carrying out expansion plans.

Tokai Rika Philippines is set to construct an additional manufacturing line for automotive switches, as well as a warehouse with the latest technology of a lead-free soldering system, while Technol Eight Philippines will start manufacturing their new product line – body shell parts and components – for the Vios.

Toyota Boshoku Philippines intends to expand its door trim line as well as introduce or localize new products such as headlining and automotive fabric flame lamination.

Philippine Auto Components, Inc. will also be working on expanding its plant area to increase the capacity for the dial printing molding process and to accommodate a new product, the Sonar Sensor.

While industry players are eagerly waiting for the release of the automotive industry roadmap containing strategies to support the growth of the local industry, Sugata said firms will also have to undertake their own preparations.

“It is important for us to improve our competitiveness through our own efforts, but the industry definitely needs support from the government to ensure sustainable growth,” he said.

Auto vehicle manufacturers and auto parts makers expect the roadmap to pave the way for the Philippines to be the next auto manufacturing base in the Association of Southeast Asian Nations (ASEAN) region.

Toyota Motor Asia Pacific Engineering & Manufacturing purchasing group executive vice president Yasuhiro Shido said auto parts suppliers should be ready to face challenges in Asia as the region is seen to continue to grow.

“Reinforce your management base in the areas of safety, quality and good labor relations,” he said.

He also said suppliers will need to strengthen and broaden their production base, as well as make their businesses eco-friendly.

In response, Toyota Suppliers Club (TSC) chairman Rafael Villarreal said member-firms are taking on the challenge in line with the upcoming ASEAN integration next year.

“The implication of this significant change will surely affect our industry and I wish to remind all our members to prepare for this. This will also be a great opportunity for local parts exporters to expand their business within the ASEAN region,” he said.

TSC is composed of 92 member companies which supply products to TMPC.

As of the first quarter, exports of the Toyota Group composed of Toyota Autoparts Philippines, Inc. and other domestic parts makers, declined by 13 percent to $220 million from a year ago.

Despite the decrease, TMPC is optimistic total exports for this year would hit $1 billion given expansion plans.

Toyota Group’s exports reached more than $900 million last year.