Toyota urges government support for car sector

MANILA, Philippines — Toyota Motor Philippines (TMP), part of the Ty-owned GT Capital Holdings Inc. listed conglomerate, has underscored the big role of the automotive industry in the recovery of the Philippine economy from the onslaught of COVID-19.

But TMP chairman Alfred Ty said the whole local automotive industry needs government support to be able to survive in the long term and not just the impact of the pandemic, noting that the experience of other countries, which saw their local vehicle industries die, should offer a cautionary tale.

Even before the onset of COVID-19, the Philippine automotive industry was already struggling – with some manufacturers packing their bags and closing their factories in the Philippines.

“With your help, we would like to promote awareness about the big role of the automotive industry toward economic recovery. We would like to send a message of hope that while there are continuing challenges brought about by the big volume reduction, the automotive industry is doing its best to gradually recover production, sales, and service,” Ty said in a briefing with journalists, the company’s first physical event for the year.

On the sidelines of the lunch meeting, Ty said in the long run, the Philippines really needs to encourage more car manufacturers to set up shop in the country instead of just relying on imported completely built-up units from neighboring Thailand or Vietnam.

A booming local industry, Ty said, would create related industries such as car parts manufacturing. Government should likewise encourage the local autoparts makers through incentives and policies.

However, in recent years, car companies have slowly been making an exit from the local automotive manufacturing industry with Honda Philippines as the latest to pull out.

Last February, Honda announced that it was stopping the production of some of its brands, the BRV and City, in its Sta. Rosa plant in Laguna. These were the two models made in the Philippines.

American car brand Ford, likewise, also left the country some years back.

Moving forward, Ty said the automotive industry really needs to support local assemblers.

“We really need more manufacturers,” Ty said, adding that while this would tighten competition it would still be good for the automotive industry and the economy.

With the impact of COVID-19, Ty said Toyota itself is seeking an extension of the CARS program, the government’s incentives program for the automotive industry.

Ty said they are hoping that the Comprehensive Automotive Resurgence Strategy (CARS) is extended for three years to enable the participants to meet the production targets, which have been hampered by the pandemic.

CARS is a six year program wherein participants need to meet a production volume target – at least 200,000 units – to enjoy incentives from the government. Toyota has enrolled the Vios sedan as its entry in the CARs program.

In all, Ty said 2020 has been Toyota’s biggest challenge in its 32-year history in the country, but he assured stakeholders that the company will continuously support the government’s initiative to open up the economy.