Toyota PH unit urges suppliers to gear up for motorization

MANILA, Philippines—The Philippine automotive industry’s robust performance in 2012 up to the first quarter of 2013 is now propelling the country toward greater motorization.

Toyota Motor Philippines Corp. president Michinobu Sugata said this was the assessment reached during the 2013 Toyota Supplier Conference and 13th Toyota Suppliers Club Assembly held recently at the Sofitel Philippine Plaza Manila.

Citing the positive economic prospects of the country, brought on by the economy’s 7.8 percent expansion in the first quarter, and the soon-to-be finalized Philippine Auto Policy of the Department of Trade and Industry, Sugata further encouraged suppliers to take advantage of a promising business landscape for the local automotive industry.

Also, Trade Secretary Gregory L. Domingo said that the new auto policy would provide the framework that would make business more viable for both auto manufacturers and parts makers.

Toyota and its suppliers are at the forefront of cooperating with the government to ensure the sustainability of the industry and improve the competitiveness of the Philippines as an automotive manufacturing base in Southeast Asia, Sugata said.

He also urged all local suppliers to pursue localization of bulky parts to reduce logistics costs.

“Localization, combined with simple production lines, better labor relations and improved risk management, will enable the Philippines to … ensure competitiveness,” he said.

Toyota strongly believes that, given the right policy environment, the Philippines will catch up with the third wave of motorization within the region. Sugata said this would pave the way for increased economic activity in the country.

In 2012, local automobile sales totaled a record 183,000 units.

In the first four months of 2013, the Chamber of Auto Manufacturers in the Philippines Inc. (Campi) and the Truck Manufacturers Association (TMA) reported record car and truck sales of 56,590 units, growing by 27.4 percent from that of last year. Campi and TMA said total industry sales could exceed the 200,000-unit target set for the year.

During an investment forum held last March 13, in Nagoya, Japan, Domingo explained the framework of the new Philippine Auto Policy to over 150 Japanese suppliers. The forum was held to attract new Japanese auto investments in the Philippines.

Soon after the investment forum in Japan, officials of Toyota Motor Asia Pacific (TMAP) and TMP met at the Makati Shangri-La to study the implications of the new Philippine Auto Policy and the opportunities it would entail.

Jonathan Lara, a salesman for a company that distributes Toyota and Mitsubishi models, said in a phone interview that more inquiries translated to actual sales this year compared to last year.

“I’ve noticed that buyers here keep getting the latest models. Compact cars are the fastest sellers. I often see brand-new cars still without plates. I’ve been to Australia and there seemed to be more second-hand cars there,” he said.

Competition in car sales has become stiffer, Lara said, due to financing schemes and the influx of brands, aside from the usual bestsellers—Toyota, Mitsubishi, Nissan, Honda—from Japan.

Hyundai, a Korean brand, as well as other brands from other countries are also aggressively targeting the Philippine market, he added.