TOYOTA Motor Philippines (TMP) may surpass its full-year car sales target despite another looming price hike as a result of the depreciation of the local currency.
Mike G. Masamayor, TMP vice-president of sales planning department, told reporters last week the Japanese car manufacturer is “going to overachieve” its goal of selling about 175,000 units for the entire year. Year to date, the company has sold 103,000 vehicles.
“Aside from growth from stable economic conditions, there is an ‘excise tax scare’ so everybody’s rushing to buy vehicles, especially the expensive vehicles,” Mr. Masamayor said, noting that sales are historically strong in the last two months of the year.
The government is mulling the imposition of higher excise taxes on vehicles to raise revenues, a move that has raised concern over its potential impact on domestic vehicle sales.
TMP President Satoru Suzuki had said the looming price increases as a result of the proposed new taxes will impact sales — initially, at least — with its chief admitting the company expects “some demand slowdown.”
In the first half, TMP sold 84,616 units, with record-breaking sales of 16,497 units in June, surpassing the previous monthly record of 15,791 units in May.
Sales may have been robust, but TMP experienced a 7% decline in net earnings to P6.3 billion in the first half of 2017 from P6.8 billion a year ago due to unfavorable foreign exchange differential and higher operating and overhead costs.
TMP implemented a 2% price increase across the board in March to protect margins. Another 2% hike will be seen in September.
“That level of price increase, customers can accept… Once that is spread through amortization, wala na siyang impact (there will be no impact),” Mr. Masamayor said.
First-semester revenues grew 15% to P82.1 billion from P71.3 billion. Toyota sold 85,728 vehicles during the period, up 18%, on the strength of the Vios, Fortuner, Innova and Avanza models.
TMP cornered the lion’s share of the market with 39% of the Philippine auto sector.
TMP is part of GT Capital Holdings, Inc., the holding firm of tycoon George S.K. Ty, which also has interests in banking, real estate, life and nonlife insurance and infrastructure. — Krista Angela M. Montealegre
