By Bernie Cahiles-Magkilat
The country’s largest car company Toyota Motor Philippines (TMP) sees a modest market recovery this year as inflation has stabilized boosting consumer confidence again.
TMP President Saturo Suzuki said that industry sales could start to recover by at least 5 percent this year with improved sales starting the election month of May.
“We see some signs of recovery because of election in May, inflation has stabilized so market confidence has improved,” he said. But since the industry struggled in the first quarter of the year, growth in sales is expected to be minimal at 5 percent at least for the year.
In the case of TMP, Suzuki the company is likely to follow the industry’s minimal growth figure.
He noted that its sales of Vios under the CARS (Comprehensive Automotive Resurgence Strategy) Program have been affected by the higher excise taxes imposed under the TRAIN. They were only able to produce 30,000 units on the first months of their CARS production as sales had been laggard at 3,000 units only a month.
Under the CARS Program, a participant is required to produce a total of 200,000 units over a six year period or 33,000 units a year. TMP only started production of its CARS Program model Vios in July last year.
Meanwhile, TMP is studying of possibly introducing other hybrid vehicle models but would like to see the government narrow down the gap in excise taxes and craft an incentives program akin to the CARS Program to entice investments and ensure entry of environment-friendly vehicles in the domestic market.
TMP President Satoru Suzuki told reporters at the Toyota Hybrid Electric Technology Conference that Toyota has many HEV (hybrid electric vehicle) models globally other than Prius, the only Toyota HEV model here is imported from Japan but has not been taking off because of its high price point at P2.2 million.
“There is no bright future if we continue with this model with this price range so we are thinking of something different or some other models. We need other sources not just from Japan, but like ASEAN, we need to find an appropriate model for the Philippines,” he said noting that its affiliate in Thailand has been producing two HEV models Camry and C-HR, a small SUV.
Both HEV models are also performing well in Thailand with C-HR accounting for 70 percent of total hybrid variant sales in Thailand while Camry has 40 percent share.
It would be advantageous to import from Thailand because being an ASEAN country, any importation from the region will be zero duty unlike Japan which carries a 30 percent tariff. Thus sourcing from Thailand could help reduce the price for the company’s HEV models.
Suzuki further noted that if government could only narrow down the 0-50 percent gap in the excise tax for hybrid vehicles it would be a bigger help.
“The current reduced 50 percent in excise tax is not enough,” he pointed out noting that hybrid vehicles do not have government support even under the TRAIN Law, thus, discouraging them to further promote their models and expanding the market for these products.
In fact, TMP’s sales of Prius have always been in the single digit. Last year, there were only 7 units of Prius sold or around 300 units since the model was introduced in the country several years ago.
Comparatively, Thailand attracts all the investments in e-vehicles because the Thai government has been very supportive in terms of incentives.