Toyota to raise local vehicle production

MANILA, Philippines - Toyota Motor Philippines (TMP), the country’s largest automobile manufacturer, announced that they will be increasing their local vehicle production for next year by 25 percent.

In an interview, TMP vice president Rommel Gutierrez said that currently, their Laguna facility is only 75 percent utilized. Toyota manufactures Vios and Innova here.

By next year, Gutierrez said that they will have “full utilization” of the plant. This means that they will be producing 25,000 vehicles at their Santa Rosa plant. Gutierrez said that they may choose to produce 12,500 Vios and 12,500 Innova but it may change depending on the demand.

However, Angel Dimalanta, president of the Automotive Industry Workers’ Alliance (AIWA) said that Toyota management cannot assure them that local production of Inova and Vios will continue once imported vehicles become cheaper.

Under the Japan Philippines Economic Partnership Agreement (JPEPA), Dimalanta said that the 20-percent to 30-percent tariff on imported vehicles will be removed.

For instance, Dimalanta noted that the imported Hi-Ace now costs P1.1 million. If it becomes 20-percent cheaper, then the price will be lower than the locally produced Inova.

Currently, the Inova produced in Indonesia is $2,000 cheaper and the Vios made in Thailand is $1,000 cheaper.

Dimalanta said that for this year a total of 22,000 Inova and Vios were produced here. For next year, he said there is a big possibility that the number of vehicles Toyota makes here will go down as the imported ones become more affordable.

Once this happens, Dimalanta said local management cannot assure them that the employees will keep their job and production here will continue because it is the decision of the mother company in Japan.

Toyota Philippines is just starting to recover from the slump in demand. For three months, the company has removed the Monday production shift. Dimalanta said they have restored the shift early this month.

“We are starting to recover because the industry is very volatile,” Dimalanta explained. Toyota has 1,400 employees and Dimalanta said more than 700 will be affected. Should the local production be halted, he said the line workers will be the first to be retrenched.

He said that if the agreement under the JPEPA is not corrected, there will be no more auto production in the country by 2012. “If importation is cheaper then why would you produce here.”