The car industry is expecting a rebound in sales this year, targeting to sell 320,000 units on the back of improved demand, Toyota Philippines officials said.
Toyota Motors Philippines (TMP) President Atsuhiro Okamoto said that the industry expects to sell more cars this year, although the projection may be impeded by newly imposed safeguard duties on vehicles.
This target is 32% higher than their estimation of 242,000 units sold last year. Toyota itself targets 130,000 units this year after selling 100,019 last year, which accounted for a 44.69% market share.
“Macro indicators point to the return of economic activity, especially for the latter half of the year,” Mr. Okamoto said in a press conference on Friday, referring to a return in remittances and other favorable market factors.
But he said market recovery will be adversely affected by safeguard measures imposed by the Trade department on imported cars. The department had slapped duties after its investigation found a link between a surge in imports and declining local jobs.
“TMP operates on the basis of a combination of locally produced and imported vehicles. We will maximize our efforts to promote sales of our Vios and Innova to cushion the impact of safeguard duties. We are counting on the support of Filipinos to buy Filipino,” Mr. Okamota said.
Toyota locally produces Vios and Innova in its Laguna facility.
Toyota Special Assistant to the President Vince S. Socco said that lower-priced imported cars will likely be most impacted by the duties, which are based on fixed amounts rather than rates.
The Toyota officials also commented on the competitiveness of Philippine car manufacturing after Nissan Philippines Inc. announced that it would halt production at its Laguna plant in March. Honda Cars Philippines closed its own plant last year.
“It’s a volume game. We need volume in this industry, and so the number of CBU (completely built up/imported) and CKD (completely knocked down/locally assembled) matter together to determine the size of the volume of the market for the head office to consider your country as an investment site,” TMP Chairman Alfred V. Ty said.
“It’s not just a one-to-one selling, but really it’s being able to assess the viability.”
Mr. Okamoto said Philippine competitiveness, compared to Southeast Asian neighbors, depends on cost competitiveness, productivity, and quality.
Philippine productivity is “competitive enough,” in Asia, he said, but cost and quality still need improvement.
The Trade department had said that the Nissan closure is proof of the need for safeguard duties on imports to protect local manufacturing. Industry group Chamber of Automotive Manufacturers of the Philippines, Inc. criticized the move, saying that there should be a balance between imports and assembly.
CAMPI and the Truck Manufacturers Association sales fell 39.5% to 223,793 units in 2020.
Workers group Philippine Metalworkers Alliance, which had petitioned for the safeguards, said in a recent statement that the duties are not enough to save the industry. The group said that the government must revisit its car industry development program and address the high costs of power and transportation.