Muted Asean demand pulls down Toyota supplier profits

The Toyota Group of suppliers posted an 8 percent decline in export revenues last year to $820 million, due largely to the continued decline in vehicle sales in Thailand and Indonesia, two of the biggest automotive markets in the region.

“The picture is that the Asean, especially Thailand and Indonesia, is seeing a big drop in sales and that’s why the bulk of the exports [of the Toyota suppliers] like transmission and wiring harness went down as well,” said Richard B. Valdez, vice president of the purchasing division at Toyota Motor Philippines Corp. (TMP).

Last year’s exports of automotive parts were sourced from 14 suppliers belonging to the Toyota Suppliers Club, which included Aichi Forging Co., EDS Manufacturing Inc., Fujitsu Ten Corp. of the Phils., Tokai Rica Phils. Inc., Toyota Autoparts Phils. Inc. (TAP), and Yazaki Torres Manufacturing Inc.

About 20 percent of the $820 million export receipts came from TAP, which produces manual transmissions.

Meanwhile, the indirect exports of automotive parts by 11 other Toyota suppliers stood at $182 million. These were shipped to Toyota affiliates in 14 countries in Asia, South Africa and South America.

Valdez explained Toyota suppliers engage in two kinds of exports. “Indirect exports are being coursed through TMP. We buy those parts from the suppliers and then we export these to the Toyota affiliates. As for direct exports, the suppliers themselves would export directly to their affiliates in the region, which will in turn supply to a Toyota plant,” Valdez said.

For this year, Valdez said the industry was expecting export revenues to remain flat or the same as last year’s receipts given the continued decline in vehicle sales, particularly in Thailand and Indonesia.  Amy R. Remo