Toyota plans P4.5 billion Luzon logistics hub for imported vehicles

MANILA, Philippines — Toyota Motor Philippines Corp. (TMPC) is spending P4.5 billion to build a logistics hub for imported vehicles in Luzon next year as it expects higher sales volume in the future.

This investment is being planned by the country’s biggest automotive player even as the government is evaluating a petition to impose safeguard duty on all vehicle imports, and considering slapping tariff on vehicles entering the country from Thailand.

Outgoing TMPC president Satoru Suzuki told reporters yesterday the investment is being made for a new logistics hub to be located somewhere in Luzon.

He said the new logistics hub would be put up “because our sales volume is expanding more and more. So, sooner or later, our supply capacity will overflow.”

Intended for completely built units (CBUs) or imported vehicles, the logistics hub would be bigger than TMPC’s stock yard in Santa Rosa, Laguna which could hold 4,000 to 5,000 vehicles.

Even with the planned logistics hub for imported vehicles, Suzuki said TMPC would keep the stock yard in Santa Rosa for locally produced vehicles such as the Vios and Innova.

The new logistics hub is expected to be operational by late next year.

Suzuki said TMPC is proceeding with a plan to set up a logistics hub for CBUs even as there is a pending petition from the Philippine Metalworkers Alliance to impose safeguard duty on vehicle imports, and as the Department of Trade and Industry is considering subjecting imported automobiles from Thailand to tariff as a form of compensation for the latter’s non-compliance to a World Trade Organization order which favored the Philippines on a cigarette tax case.

He said proceeding with a safeguard measure on vehicle imports would be against free trade.

“I don’t know what the government will do, but if they stop the importation or charge higher tariff, definitely, our sales volume will drop,” he said.

He said TMPC would be raising the concern on the possible imposition of safeguard measure on vehicle imports to the government through the Chamber of Automotive Manufacturers of the Philippines Inc.

TMPC chairman Alfred Ty also said open discussion with stakeholders is needed on the issue.

If the government’s aim is to encourage local manufacturing, he said imposition of tariff on vehicle imports would run counter to this goal.

“We should look at it and do the numbers, but as a whole that just dampens. What we’re trying to do is stimulate the market. That just doesn’t equate to that objective,” he said.

Asked for an outlook this year, he said TMPC is expected to post at least single-digit growth.

“So, it’s good to show some growth this year. Hopefully, at least the momentum will be positive for next year,” he said.

Similar to many automotive players in the country, TMPC ended last year with a decline in sales which reached 153,004 units, 16.8 percent lower than the 183,908 units in 2017, on weaker demand for cars due to the higher tax slapped on automobiles under the government’s tax reform program.

As of end-October this year, TMPC sales were up five percent to 130,520 units from 124,329 units a year ago.