IMPORTS VS LOCALLY-ASSEMBLED: Balance of vehicle mix needed

    Opportunity. While the imposition of safeguard measures could limit growth in sales, TMP looks forward to the opportunity this can open for its locally-manufactured vehicles - the Vios as well as the Innova.

    Toyota Motor Philippines (TMP) expects to grow its sales by 30 percent this year after a 38-percent slump in 2020 and in tandem with the similar growth rate of the industry.

    But officials expressed concern the imposition of provisional safeguard duties on completely built-up (CBU) units would adversely affect market recovery and would limit growth and cited the need to balance CBUs with locally-assembled vehicles.

    Despite this, TMP anticipates the operation by the fourth quarter of the year its P4.7-billion logistics hub in Batangas to facilitate shipment of vehicles.

    Given TMP’s position as a major player for both CBU and completely knocked-down (CKD) operations,

    TMP president Atsuhiro Okamoto in a media briefing over the weekend.

    noted how the safeguard measures will affect not just car companies but also the entire supply chain of the local car manufacturing sector.

    Given this, Okamoto said TMP is optimistic of the opportunity that can open for its locally-manufactured vehicles – the Vios and Innova despite the fact  imported CBU models comprise majority of its lineup.

    TMP is only one of two companies that sell both locally-made and imported vehicles.

    “We are thankful for the government’s initiative to promote local production. However, the automotive industry is driven by volume and motivated by a wide range of choices. A mix of imported CBU models will still be needed to be able to meet the mobility needs of the country. We are confident that we will find ways to move forward as we have always done.

    Together with the government, we are excited to work towards realizing our vision of providing mobility for all,” Okamoto said.

    TMP chairman Alfred Ty for his part welcomed the  extension of the Comprehensive Automotive Resurgence Strategy (CARS) Program due to the impact of the pandemic on car manufacturing and sales, saying the move is “ very crucial for the existence of local production not only for the existing players but also in attracting additional investment in the industry. “

    No official announcement has been made by the Board of Investments which runs the program.

    TMP is one of two participants in the CARS program with the Vios as its entry

    “In this business of the automotive industry, where the market is still at a growing stage and lower-priced vehicles dominate new cars sold, the key to survival is volume. Economies of scale is much needed to make investments sustainable, whether a CBU or CKD player, or both.” said Ty.

    Okamoto said Toyota widened its market  to a record of 44.69 percent last year despite a shrinking market with sales of 100,019 units.

    This year, Okamoto said sales will grow to 130,000 units.

    This  would be equivalent to a 41 percent market share for TMP with total automotive sales projected at 320,000 units, which is a 30 percent increase from 242,000 units sold in 2020.

    Meanwhile, TMP said the 32-hectare  Batangas Vehicle Logistics Hub near Batangas Port will house a Pre-delivery Inspection and Post Production Installation facility with a capacity 160,000 units per year, and a stockyard that can accommodate a at least 4,500 cars at a time.

    Similar to its Santa Rosa Vehicle Logistics Center, the new facility will have an 18-truck lane covered car carrier loading and unloading area.