Toyota Motor Philippines Corp. is initially investing more than 1 billion yen—equivalent to a little over P400 million, at the prevailing exchange rate—for its assembly facility in Laguna, as part of the company’s preparations to participate in the government’s Comprehensive Automotive Resurgence Strategy (CARS) program.
TMP president Satoru Suzuki said Thursday night that the company has already secured the approval of its parent firm in Japan to apply for the CARS program.
Although he did not cite the specific model to be enrolled, it has already been previously announced that the company was considering the Toyota Vios for the scheme.
According to Suzuki, the fresh capital outlay, which may be rolled out over the next two years, will be used to further expand the production capacity of the plant and to help boost the local content of the model to be enrolled under the P27-billion incentive program.
As of end 2015, TMP produced from its Laguna plant a total of 49,000 units (for both the Vios and Innova models) while the so-called local content stood at about 40 percent.
“We are investing more than 1 billion yen because the CARS program also requires some additional costs for localization. We have to meet such requirements and that’s why we’re doing this [investment],” Suzuki said.
TMP will have to ramp up its capacity as the program requires the vehicle assembler to produce 200,000 units for a single model over a span of six years. This meant an average 33,300 vehicles must be produced every year for that particular model alone.
TMP first vice president Rommel Gutierrez added that under the CARS program, there are five large plastic parts that have to be sourced locally in order to fully avail of the incentives provide under the scheme. In doing so, the vehicle manufacturer will be able to raise its local content to about 60 percent.