THE country’s leading car manufacturer stands to lose P1 billion in additional costs if the peso weakens further in the second semester.
However, Toyota Motor Philippines Corp. is optimistic its new Vios, enrolled under the Comprehensive Automotive Resurgence Strategy program, will help the firm recover its sales in the closing half of the year. The TMP on Thursday launched its CARS-registered Vios, a version of the popular vehicle brand that is 40 percent made of local parts.
The Vios is TMP’s enrolled model to the Cars program, the government’s time-bound and performance-based fiscal support intended to attract investments in the local production of vehicles and parts. Total allocation for the program is at P27 billion, and each enrolled model can obtain up to P9 billion of fiscal incentives.
TMP applied the Vios to the program in 2016, and vowed to produce, as a matter of contract, 200,000 units of the model for the next six years beginning this year. It invested P5.53 billion for the localization project.
“Much of this model is proudly made in the Philippines, a total of 352 individual parts, 22 percent higher than in the previous Vios. This localization is the result of P5.53 billion in investments by TMP and local suppliers, which represents our collective contribution to the country’s long-term economic growth,” TMP President Satoru Suzuki said in a speech.
Difficult time
In a separate news briefing, Suzuki admitted TMP needs all the boost it can get from its products in rebounding from its first semester sales decline.
He argued the current market situation—accelerating inflation, weakening of peso and the implementation of the Tax Reform for Acceleration and Inclusion—made it doubly difficult for TMP to grow from January to June. Asked how much TMP stands to lose if the peso continues to plunge, Suzuki said “for one year, I think P1 billion.”
He explained TMP still equips the majority of its vehicles with imported parts; as a consequence, it is at the short end of the stick with an unstable currency. To cope with the gloomy outlook of the economy, TMP had to increase prices of several cars by P5,000 to as much as P50,000 in the first six months of the year, Suzuki added.
For his part, Trade Secretary Ramon M. Lopez challenged TMP to overcome the challenges of the economy, and widen its employment base with the introduction of the new Vios. He said he hopes to see the Toyota Special Economic Zone, TMP’s manufacturing plant and head office, employ as many as 10,000 workers from its current 3,000-strong work force.
Lopez also invited TMP to participate in the government’s program to modernize public-utility vehicles. Last, he told the firm to take up the challenge of leading the country’s bid to become an automotive manufacturing hub in Southeast Asia.
Image credits: Nonie Reyes