Toyota keeps exports target

MANILA, Philippines–The Toyota Group, which contributes about a third of the Philippines’ automotive-related exports, aims to maintain its revenue from overseas shipments despite local and regional challenges.

Although the international market has been reported to be weakening, the Toyota Group still wants to match by the end of 2015 its 2014 sales of about $890 million, said Michinobu Sugata, Toyota Motor Philippines Corp. (TMPC) president.

“Thailand, Indonesia sales are down. Maybe exports to the US will enjoy big business, but most of the suppliers (that) export to Asian countries are down right now,” Sugata said on the sidelines of the Meralco Luminaries Awards in Makati City.

The bulk of the Toyota group’s exports go to members of the Association of Southeast Asian Nations (Asean), Japan, the United States and Taiwan.  If it keeps up, the recovery of the US economy should help Toyota’s manufacturing exports, but China’s moderate growth could still slow down shipment orders from the Asean.

In Thailand, site of Toyota’s production hub for Southeast Asia, the company continues to be plagued with logistics problems largely due to the political turmoil now affecting the capital. The company’s export revenues started to slide when Thailand experienced severe flooding a few years back.

Many manufacturers have since moved to Indonesia, which they consider to be more stable. Toyota appears to have considered turning its operations there into another Southeast Asian automotive exports hub. But the lack of infrastructure in the country, as evidenced by the heavy road traffic, has put a dent in the carmakers’ plan.

Indonesia’s own exports reached $13.3 billion in January, falling 8.09 percent year-on-year, and 9.03 percent month-on-month from December 2014, according to its Central Statistics Agency (BPS).

Non-oil/non-gas exports in January 2015 reached $11.22 billion—down by 6.24 percent year-on year-and 8.51 percent from the previous month.

Unless the trend in Indonesia improves, the Toyota group’s performance in the Philippines will be affected. Its Philippine unit sends parts and components to Indonesia, which are then placed in cars that are exported to the Middle East, Africa and the Americas.

Taiwan’s economy seems stable at the moment, while Japan’s recovery is expected to continue, although it remains vulnerable to shocks.

Despite the challenges, Sugata said, Toyota will strive to match its 2014 exports revenue.

In the Philippines, exports of Toyota Autoparts Philippines Inc. and other affiliates under the Toyota group are having difficulty moving raw materials and goods because of the port congestion in Manila.

Port congestion is a common difficulty among manufacturers across sectors, and various industry groups have called on the government to address the issue before the economy suffers serious damage.

Toyota’s auto parts exports include transmissions, constant velocity joints, wiring harness, meter assembly, and switches, among others. These parts are used in the assembly of Toyota car models in other countries. TMPC’s plant, where it assembles Vios and Innova models, is located in Sta. Rosa, Laguna.

In 2014, Toyota’s exports of auto parts and components dropped 10 percent to $890 million, from the $980 million seen in 2013, due to political disruptions in Thailand and partly due to the port congestion in the Philippines.

TMPC is a unit of GT Capital Holdings Inc, the listed holding firm led by tycoon George Ty.

The Toyota auto parts group is made up Toyota Autoparts Philippines Inc., Aichi Forging Company, EDS Manufacturing Inc., Fujitsu Ten Corp. of the Philippines, International Wiring Harness, JECO Autoparts Inc., Koyo Manufacturing Inc., Nippon Antenna (Phils.) Inc., Philippine Auto Components Inc., Philippine HKR Inc., Technol Eight Phils. Corp., Tokai Rica Phils. Inc., and Yazaki Torres Manufacturing Inc.–Riza T. Olchondra