The country’s leading automotive firm Toyota Motor Philippines Corp. (TMP) hit a snag on its growth momentum after earnings declined by nearly 16 percent in the first quarter amid weaker sales performance on the back of higher fuel prices.

In a disclosure of its parent firm GT Capital Holdings Inc., TMP reported that its net income slipped to ₱5.33 billion from January to March compared to ₱6.33 billion in the same period last year.

TMP attributed the decline to its sales performance during the three-month period, which plunged by 10.2 percent to ₱62.41 billion from ₱69.53 billion a year earlier.

Lower sales were driven by a 6.5-percent contraction in retail sales to 51,922 units from 55,513 units sold. TMP said its top-selling models were the Avanza, Hiace, and Wigo.

Despite this, TMP said the overall decline in the local automotive industry’s retail sales volume accelerated further at 9.5 percent, with sales dropping from 117,466 units to 106,292 units.

As a result, the company managed to improve its industry-leading market share to 48.9 percent in the first three months of the year from 47.8 percent in the same period last year.

The automotive industry is experiencing a sharp slowdown in vehicle sales as consumers delay purchases to cut costs amid higher fuel prices and rising costs of other goods due to the ongoing conflict in the Middle East.

To this end, TMP said it is seeing a surge in electric vehicle (EV) sales as customers opt for practicality in their cost-cutting measures.

TMP reported that EV sales, which include Lexus models, accounted for 10.6 percent of its sales volume in the first quarter. This was higher than the 8.5-percent share recorded last year.

Earlier, TMP Chairman Alfred Ty said the company is expecting EVs to account for around 20 percent of its total vehicle sales this year.

TMP also attributed its softer earnings in the quarter to foreign exchange losses from the depreciation of the Philippine peso against the United States dollar, which led to a tighter gross profit margin of 13.2 percent from 16.8 percent.

This was offset by government incentives amounting to ₱1.87 billion as part of TMP’s participation in the Comprehensive Automotive Resurgence Strategy (CARS) program.

TMP President Masando Hashimoto earlier said the automotive firm will focus on providing customers with a full range of models that support varying needs on the back of fuel cost challenges.

“Our multi-pathway approach continues to prove effective in bringing diverse mobility solutions closer to Filipinos,” he said.