By Bernie Cahiles-Magkilat
Toyota Motor Philippines (TMP) is investing P1 billion this year as part of its commitment to hike the local content of Vios, its entry model to the government’s Comprehensive Automotive Resurgence Strategy program (CARS).
This was revealed by company president Satoru Suzuki, who said that part of its 2019 capex will finance additional local content parts to ensure that Vios is a truly Philippine-made car because it has more components produced domestically.
According to Suzuki, the P1-billion capex will also form part of the initial investment of P5.4 billion the company committed under CARS.
About 90 percent of the investment is dedicated for localization of parts that will include the 5 mandatory parts such as body shell, big plastic parts and door panels, among others.
Already, the body shell of Vios will have a local content of 57 percent with the domestic production of side member panels, the largest press parts of a car. The acquisition of production capabilities for complex plastic parts like instrument panel and center console is ongoing, according to Suzuki.
Vios has a current local content of 35 percent but is expected to attain as much as 60 percent local content at the end of the program.
As a participant in the CARS Program, TMP is required to produce 200,000 units of Vios over a six-year program. This year 2019 is the first full-year of production of Vios where TMP intends to churn out 33,000 units for the domestic market.
CARS Program participants are entitled to fiscal and non-fiscal incentives. It is the anchor program in the government Manufacturing Resurgence Program, which seeks to improve the value chain supply of the country’s industries.
Meantime, TMP is looking at 10 percent increase in sales in 2019 along with the industry’s 10-15 percent growth forecast.
TMP Vice President Rommel Gutierrez said the 2019 sales growth projection is largely hinged on market adjustment from the imposition of higher auto tax in January this year.
The industry was expected to decline by 10-15 percent in 2018 in terms of sales as buyers were discouraged by the high excise taxes on cars.
But Gutierrez expressed that 2019 being is an election year would trigger higher sales. Historically, he said, demand for mobility increases during election period.
He said the industry expects more sales for commercial vehicles that will be used for political campaign sorties.