SANTA ROSA, Laguna. – The country’s leading automotive assembler has added more parts produced in-house for its bestselling car in compliance with the requirements of a government-backed program incentivizing local assembly.
Toyota Motor Philippines Corp. (TMP) said Vios has reached almost 58 percent localization as part of the model’s compliance to the Comprehensive Automotive Resurgence Strategy (CARS) program where TMP invested P5.38 billion.
Vehicles enrolled in the CARS program must be assembled locally with 50 percent or more of total body shell weight manufactured or sourced locally.
TMP said the Vios has achieved almost 58 percent localization, with 25 different steel parts pressed in house, and 51 other parts stamped by its approved suppliers.
Large plastic parts such as the front and rear bumpers, internal and external instrument panel is done at its injection molding facility using virgin plastic pellets. Moreover, the radiator and fan assembly are now sourced from a Philippines supplier.
These parts were previously sourced from either Thailand or Indonesia.
Overall, a 5 percent increase in local parts was realized for the new Vios from the previous model, with 42 percent or 356 total parts from the previous 292 parts from 34 direct supplier.
TMP said the P5.38-billion investment boosted its manufacturing capabilities at its assembly plant here to meet volume, sourcing and other requirements under CARS.
TMP said of the P5.38 billion, 88 percent or P4.72 billion was invested in parts manufacturing and the remaining P4.72 billion to vehicle manufacturing.
Of the P4.72 billion, 81 percent or P4.05 billion went directly to improving Vios’ market
competitiveness and compliance to the CARS program.
Toyota in-house investments amounted to P3.05 billion while the remaining P1 billion was divided among four outside suppliers for small body shell components, center consoles, and door trims.
These CARS-related investments include a new press stamping machine to form major side member panels — the left and right side of the sedan that holds the doors, roller hemming robots to form the mated metal parts without welding — and a resin injection molding facility to produce large plastic parts which was put into operation late last year.
“These investments have enhanced our own manufacturing capabilities, both in relation to our own production and sales targets as well as meeting the requirements by the CARS program,” said Rommel Gutierrez, TMP first vice president for corporate affairs.
The new facilities also impacted the logistic efficiency index, one of the key indicators in the CARS program being monitored by the Board of Investments.
“Improvements in the production process has also reduced the logistic requirements increasing the efficiency index from 40 percent to 45 percent since the program started,” said Luis Marcelino, TMP senior vice president for production and marketing.
The Vios is expected to achieve the required 200,000 units total volume production requirement by 2024 with annual sales currently averaging 33,000.
“We at Toyota have always believed that the automotive manufacturing industry’s growth is a catalyst for national development. As such, we have continued the local production of our best-selling model over the years, thereby providing employment and sustaining many small- and medium-scale enterprises which are the backbone of our economy,” said Satoru Suzuki, TMPI president.