MANILA, Philippines - The Toyota Group plans to spend P7.5 billion this year until 2016 for new projects and to increase the local content of the Vios vehicle model.
According to the Toyota Group, which include parts suppliers that support Toyota’s manufacturing operations, the investments are expected to be made this year until 2016 to prepare for recovery in demand from overseas, as well as to further localize the Vios assembled at the Toyota Motor Philippines Corp.’s (TMPC) plant in Sta. Rosa, Laguna.
“The slowdown in export performance is only temporary and exports will soon recover. The booming Philippine auto market will also be an additional source of growth for parts suppliers,” TMPC president Michinobu Sugata said.
While investments are expected to be made, the Toyota Group is seeking support from the government especially as many automotive firms are considering plans to pour in additional funds for expansion.
A major factor being considered in investment decisions is the approval of the much anticipated new automotive manufacturing industry roadmap.
“Approximately $300 million (worth of) investments are being considered in view of the forthcoming new auto policy. Final decisions will only be made once the government finally issues the auto road map,” the Toyota Group said.
Amid expectations of slower demand from overseas, the Toyota Group has slashed its forecast for total exports this year.
From an initial projection of around $1 billion worth of exports this year, the Toyota Group now expects its total outbound shipments to reach $897 million.
The new forecast is four percent lower than the $939 million worth of exports in 2013.
“Decline in domestic demand is foreseen in Thailand given the political situation, while market contraction is expected in Japan following the implementation of higher consumption tax beginning April 2014,” Sugata said.
As of the first quarter, the Toyota Group’s exports have reached $216 million.
The Toyota Group is composed of the following parts suppliers: Toyota Autoparts Philippines Inc. (transmissions and constant velocity joints); Aichi Forging Company (metal forged parts); EDS Manufacturing Inc. (wiring harness); Fujitsu Ten Corp. of the Phils. (security system); International Wiring Harness (wiring harness); JECO Autoparts Inc. (clocks); Koyo Manufacturing Inc. (bearings); Nippon Antenna (Phils.) Inc. (antenna); Philippine Auto Components Inc. (meter assembly combination); Philippine HKR Inc. (machining parts); Technol Eight Phils. Corp. (stamped parts); Tokai Rica Phils. Inc. (switches); and Yazaki Torres Manufacturing Inc. (wiring harness).