Automakers around the world had to contend with the fact that 2020 was an abysmal year. Global car sales only reached 76.5 million automobiles, a notable decline from a peak of 94.3 million units in 2017. Here in the Philippines, the near zero sales in April (just over 100 units) and May (less than 5,000 units) proved difficult to come back from as the industry registered an anemic annual sales of 244,274 units, a steep 53 percent of drop from 2019 figures (457,110 units).
Even the country’s most popular brand was not spared: while remaining the country’s top seller, Toyota Motor Philippines (TMP) just sold 100,019 units last year (luxury brand Lexus included), a 38 percent dip from its 2019 sales.
But despite the uncertainties and other challenges facing the industry this year, the Japanese automaker said it is reasonably optimistic that everything will move forward this year even projecting an overall industry total of 320,000 vehicles sales.
“Even though the past year has been challenging, the market has shown incredible resilience. That being said, I am pleased to announce that TMP expanded its share of the market at 41.3 percent,” said TMP president Atsuhiro Okamoto said during a recent press conference at the Grand Hyatt Hotel in Taguig.
TMP chairman Alfred Ty shared this optimism, citing efforts from the government and industry partners all contributing to improvements in market conditions and overall environment for both businesses and the consumers. “While the automotive industry as a whole may have seen challenging sales at the onset of the pandemic, we also saw gradual growth from the lowest point in May. We expect this increase to continue as Filipinos ease back into their daily routines and resume pursuing the life goals that had to take a backseat in 2020,” he said.
Ty also noted that Every week there are new developments regarding a COVID-19 vaccine, “while this may not be the be-all and end-all solution to this pandemic, it is a welcome development and a sign that progress is happening earlier than expected. Also on the brighter side of things, the ‘Build, Build, Build’ project of the government and the private sector is coming into fruition. We commend the continuous construction of these new roads and highways which will enable economic recovery efforts and bring more joy to driving.”
CARS possible extension
TMP’s top executives also welcomed the Board of Investments (BOI) recent pronouncements of its plan to extend the Comprehensive Automotive Resurgence Strategy (CARS) Program in consideration of the impact of the pandemic on car manufacturing and sales.
“We thank the government for considering the extension of the CARS Program. This is very crucial for the existence of local production not only for the existing players but also in attracting additional investment in the industry. Our automotive industry, where the market is still at a growing stage and lower-priced vehicles dominate new cars sold, the key to survival is volume. Economies of Scale is much needed to make investments sustainable, whether a Completely Built-Up (CBU) or Completely Knocked Down (CKD) player, or both,” said Ty.
On the other hand, Okamoto will be closely monitoring the imposition of the Safeguard Measures Act considering this will impact not just car companies like TMP, which incidentally is a major player for both CBU and CKD operations not to mention, the entire supply chain of the local car manufacturing sector.
“With the recent announcement of safeguard duties (imposition of safeguard bonds of P70,000 per unit on imported passenger cars and P110,000 on imported light commercial vehicles), market recovery will be adversely affected and growth may be much more limited, as early as when provisional duties are implemented. As you know, however, TMP operates on the basis of a combination of locally produced and imported vehicles. We will maximize efforts to promote sales of our (locally manufactured) Vios and Innova to cushion the impact of safeguard duties. We are counting on the support of Filipinos to Buy Filipino,” said Okamoto.
Toyota’s vast and diverse line-up of vehicles is mostly composed of imported CBU models, but TMP is optimistic of the opportunity that can open for the Vios and Innova.
Mix of local and imported CBU
“We are thankful for the government’s initiative to promote local production. However, the automotive industry is driven by volume and motivated by a wide range of choices. A mix of imported CBU models will still be needed to be able to meet the mobility needs of the country. We are confident that we will find ways to move forward as we have always done. Together with the government, we are excited to work towards realizing our vision of providing mobility for all,” Okamoto added.
In the end, TMP believes that as the largest mobility company in the Philippines, it has the responsibility to help push the local automotive industry forward, and steer the country towards economic recovery. Ty stressed the automotive industry’s role as backbone of every country’s economy, reiterating what Toyota Motor Corp. President Akio Toyoda said in his New Year’s address to the Japanese auto industry.
To further stress this point TMP recently announced that it will start operating later this year, its P4.5-billion Batangas Vehicle Logistics Hub. This 32-hectare facility, located near Batangas Port (gateway to imported vehicles) will house a Pre-delivery Inspection and Post Production Installation facility with a capacity to hold 160,000 units per year, and a stockyard that can accommodate at least 4,500 cars at a time.
Similar to its Santa Rosa Vehicle Logistics Center, the new facility will have an 18-truck lane covered car carrier loading and unloading area. This will ensure the safety and health of its team members, enabling them to operate in any weather condition. And as a strong advocate of the environment, Toyota will keep 6 hectares of the property as a “green” area.
“TMP remains committed to supporting the goal of the government to stimulate the economy and to prepare for the eventual resumption of motorization in the country. The auto industry is a key driver of economic activity and an essential part of the drive to increase mobility. At the heart of the Batangas Vehicle Logistics Hub is our promise of making ever better cars for our customers. Preserving the quality of our vehicles, from production in various plants all over the world, to delivery dealers and customers, efficient logistics is necessary,” expressed Okamoto.
Ty agreed: “The automotive industry provides mobility for all of us. And when we talk of the automotive industry, this does not only cover vehicle production and sales, but it includes parts, logistics, and public transportation. Mobility brings us a new wind, a change in landscape and, most importantly, it brings us closer to tomorrow. This 2021, I hope we can continue to support each other as we brave the challenges and seize the opportunities the new year will bring.”
IN MAIN PHOTO: TMP president Atsuhiro Okamoto fields questions from the media as TMP chairman Alfred Ty and GT Capital Auto Dealership Holdings chairman Vince Socco listen intently
Charles E. Buban is an old timer in the Philippine automotive journalism scene. He first started covering the automotive beat in 2003, writing news and reviews of new models and car tech, among other car-related stuff. When not writing about cars, he could often be seen riding his mountain bike or doing long walks in the hope of catching a couple of legendary Pokemons.