Toyota banks on new Vios model to lift second half sales

MANILA, Philippines — The local unit of Japanese carmaker Toyota Motor Corp. is banking on the new Vios model to help lift the company’s sales in the second half of the year.

Jose Maria Atienza, senior vice president for marketing at Toyota Motor Philippines Corp. (TMPC), said in a press conference yesterday that while the company’s sales declined year-on-year in the first semester, this is expected to pick up in the second half of the year with the new Vios as one of the drivers.

“We are hoping that as forecasted, the market would rebound in the second half and Vios will be a big part of sales this year,” he said.

Even with sales seen to post growth in the second half, he said TMPC’s total sales this year would likely at most match last year’s 182,837 units.

TMPC’s sales reached 73,136 units in the first semester, 14.7 percent lower than the 85,728 units in the same period a year ago amid tempered consumer demand following the implementation of the first package of the Tax Reform for Acceleration and Inclusion (TRAIN) Law which slapped higher taxes on automobiles.

Aside from TRAIN, TMPC president Satoru Suzuki said the company’s move to increase prices of cars due to higher import costs following the weakening of the peso against the dollar also affected the sales performance.

He said the weakening of the peso against the dollar has resulted in P1 billion worth of additional cost for the company this year.

Given the additional cost, Atienza said TMPC has hiked prices of cars by one to two percent this year.

The new Vios is TMPC’s participating model under the government’s Comprehensive Automotive Resurgence Strategy (CARS) which seeks to revitalize the Philippine automotive industry and position the country as a regional automotive manufacturing hub by providing both fiscal and non-fiscal support to attract investments.

To enjoy incentives under the CARS, TMPC, which is investing over P5 billion for the program, must manufacture at least 200,000 units of the Vios in the next six years.

TMPC president Satoru Suzuki said achieving the required 200,000 units is a big challenge considering it took the company 10 years to have that cumulative production level for previous Vios variants.

“With the support and commitment of our suppliers and other stakeholders, we are confident that we will achieve this target and comply with CARS’ twin overall goals: higher production volume and greater localization,” he said.

The company intends to produce 3,500 units of the new Vios starting next month to achieve the target.

Luis Marcelino, senior vice president for manufacturing at TMPC, said the local content of the new Vios is at 40 percent, higher than the previous Vios model which had around 20 to 25 percent.

“To reach 50 percent, we need to do more localization. We are still in the process of doing that for other commodities,” he said.

Trade Secretary Ramon Lopez said under the CARS program, the target is to achieve 50 percent localization of program enrolled-models.

He said the rollout of the new Vios marks TMPC’s commitment to the CARS program.

“With the rollout of the new Vios, we will not only help jumpstart the local automotive industry but also generate more jobs and income opportunities for our countrymen,” he said.