Toyota Philippines Poised to Invest USD70 Million to Increase Vehicle Production

Manila, Philippines: Japan based Toyota Motor Corp has planned to invest USD70 million in its Philippines division - Toyota Motor Philippines. The aforementioned investment aims to increase automobile production in the country, thereby enabling the Toyota Motor to qualify for tax incentive. As per this strategic move, 230 thousand units of Vios subcompact sedans would be produced by Toyota Motor Philippines, under a six year incentive programme worth USD600 million. The government has introduced this plan in 2015 in order to increase regional competitiveness and support automotive production.

The country is anticipated to witness a similar move by Mitsubishi Motors Corp. which is poised to invest USD91 million to produce 200,000 Mirage G4 and Mirage cars initiating in 2017.

According to a recent report published by TechSci Research, “Philippines Tyre Market Forecast and Opportunities, 2020” several plans are being devised by the country’s government in order to boost automobile sector. Implementation of Motor Vehicle Development Program (MVDP) in 2012 has offered lucrative opportunities for various OEMs to invest in the country. Moreover, growing concentration of automobile manufacturers in the country is expected to boost demand for tires from the OEM segment over the next five years. Additionally, as sales of automobiles continue to increase, demand for tires from the replacement market is also expected to surge in the ensuing years.

Further, Philippines tire market is forecast to reach USD970 million by 2020. Presently, a major share of the demand for tires including passenger car tires, commercial vehicle tires and two-wheeler tires is met by imports, as there is only one tire manufacturing facility in the country. Increase in the number of OEMs, rising disposable income and introduction of new vehicle models in the domestic market are the major factors driving the automobile market in the Philippines, which is boosting the country’s tire market. Though high disposable income levels have fuelled robust growth in sales of passenger cars, two-wheelers continue to be the preferred mode of transport for majority of the country’s population. Consequently, two-wheeler tire segment is forecast to continue its domination in the Philippines tire market through 2020.