Toyota Autoparts Exports Shift to Higher Gear

Next to garments and electronics, automotive parts manufacturing is the country’s biggest industry. From 1997 to 2002, the industry’s growth rate was pegged at a steady 9 percent annually. Exports in 2003 reached US$1.3 billion. Last September 21, an announcement from a leading carmaker is seen to boost this sector even more.

Marked by a ceremony at its facilities in Santa Rosa, Laguna, Toyota Autoparts Philippines (TAP), which manufactures constant velocity (CV) joints and transmissions for vehicles, started exporting transmission assemblies to Japan. The locally produced components will form part of Toyota Motor Corp.’s (TMC) Global Supply Network. To date, TAP exports transmissions to seven countries, namely Taiwan, Vietnam, Thailand, Malaysia, Indonesia, India and South Africa.

"We are proud that these Philippine-made parts are now a major component of this supply network," said TAP chairman George S.K. Ty in his welcome remarks. This shows Toyota’s commitment in the development of the local automotive industry. We also support the growth of a strong local supplier base, in line with the government’s thrust of promoting SMEs," he added.

Together with President Gloria Macapagal Arroyo and Department of Trade and Industry secretary Cesar Purisima, the event was also attended by top officials of TMC in Japan led by honorary chairman Dr. Soichiro Toyoda and senior managing director Akio Toyoda.

"The primary task that we have set up for ourselves is to enhance our contribution to the Philippine economy by expanding exports from the Philippines," said Dr. Toyoda. "So TAP has been assigned as a production base for the global market."

In a meeting in 2002, TMC president Fujio Cho pledged their commitment for added investment to Arroyo. Since then, the Toyota Group, which is formed by TAP, Toyota Motor Philippines and other local parts makers, has invested more than P15 billion. An additional P7.2 billion is planned for capacity improvements and plant expansion from this year to 2006, Ty said.

As a production base, Toyota says the Philippines will play an important role in the carmaker’s IMV project, which is seen to create new supply structures for pickup trucks and other multi-purpose vehicles.

In 2003, 212, 000 transmissions and 182,000 CV joints were produced, generating P4.3 billion in exports. This year, TAP production of transmissions will increase to 235,000 units and CV joints to 207,000, with exports estimated to reach P4.8 billion. Toyota says their company accounts for 28 percent of the country’s auto parts exports in 2003.

According to Toyota officials, the company is presently concentrating on parts exportation and has no immediate plans of venturing into completely built-up (CBU) exports. "We are committed in developing the local parts industry, as we believe an auto industry’s growth should start from within," said TMP public affairs officer Ariel de Jesus.