Toyota Motor Philippines Corp. said it will invest another P1 billion in 2019 to increase the local content of the Vios, its entry to the Comprehensive Automotive Resurgence Strategy or Cars program.
TMPC president Satoru Suzuki said the 2019 capex would finance additional local content parts to render the Vios more as a Philippine-made car.
The P1-billion capex is a part of the initial investment of P5.4 billion the company committed under the program.
About 90 percent of the investment is dedicated for localization of parts that will include the five mandatory parts such as body shell, big plastic parts and door panels.
Toyota is pushing its body shell localization to 57 percent with the local production of side member panels, representing the largest press parts of a car. The company said the acquisition of production capabilities for complex plastic parts like instrument panel and center console was also ongoing.
Investments under the Cars program are expected to go higher as more parts are localized, said TMPC vice president for corporate affairs Rommel Gutierrez.
“It can actually increase based on the localization capacity of suppliers. The localization program is continuing and on our part, we continue to increase the local content of our cars,” he said.
The Cars program is the biggest and most ambitious automotive incentives program the Philippine government has offered to car manufacturers and assemblers.
The government committed P27 billion worth of fiscal and non-fiscal incentives to three participating car companies, all time-bound within the next six years.
In exchange, accredited car companies should be able to manufacture at least 200,000 units of 4-wheeled passenger cars each or a total of 600,000 units.
Incentives will kick in once companies produced their 101,000th unit.
Toyota said it was looking forward to a modest sales hike of 10 percent in 2019 over 2018’s sales.
Suzuki said the automotive market would improve in 2019 as consumers have already adjusted to the new pricing scheme.
“For 2019, I think growth should be positive than this [2018]. We believe the market is growing, but not at the rate we want” he said.
TMPC recorded a 14-percent to 15-percent decline in sales in 2018.
