Toyota Motor Philippines Corp. plans to invest P2.5 billion to improve car assembly operations and accommodate full-model change of locally-built units in the Philippines.
“This has not yet been approved but we are planning to make this happen. Most of the money was allotted to allow for a major improvement of the all-new Innova. The rest will be used to improve speed lines and the paint shop,” TMPC president Michinobu Sugata said Thursday night at the sidelines of an event introducing the new Toyota Alphard at the Manila Peninsula Hotel in Makati City.
The company generated $1 billion in revenues in 2014, with 20 percent to 25 percent accounted by auto parts sales and exports.
Auto parts exports generate $1 billion in revenues yearly for Toyota but the 2014 figures were dampened by the production slump in Thailand and Indonesia. Toyota auto parts export in 2014 stood at just $890 million in 2014.
The car company with the most dominant share in the local automotive industry announced a conservative increase in projected sales for 2015 to 110,000 units from 106,000 units in 2014.
The modest forecast takes into account a massive expansion on after-sales service in preparation for future production and plant expansion.
About 737,000 units of Toyota vehicles were put on after-sales maintenance in 2014.
“Because of nearly 1 million Toyota cars on after-sales services, we need to expand service capacity first rather than new car sales. This will not necessarily lower our margins but it will somehow affect our market share and we have already anticipated that,” said Sugata.
Toyota expects car sales to hit 200,000 units in 2020, about 40 percent of the total industry target of 500,000 units.
Sales of locally assembled cars in 2015 are projected to increase to 43,000 units, a marginal jump from 41,644 units in 2014, compared with the plant capacity of 35,000 units per annum only.
“This was made possible because our workers render 2-hour overtime every day to satisfy the demand for more Toyota cars. As we expect moderate expansion, we also have to expand production a bit,” said Sugata.
He said 2015 would be a transition year for Toyota Philippines because of competing priorities among after-sales and new car sales, while the company is bullish to keep on expanding.
To better service Toyota car owners, the company is putting up 10 more dealerships in 2015 on top of the current 45 dealers.
The dealership expansion will be carried out in the provinces to spread out service capacity expansion.