THE parent company of Toyota Motor Philippines Corp. (TMP) does not expect automotive imports from Thailand to decline, amid the trade department’s move to consider retaliatory measures on these as an offshoot of the two countries’ long-standing dispute over cigarette imports.
GT Capital Holdings, Inc. President Carmelo Maria Luza Bautista told reporters last week that it seems unlikely that Thailand will limit auto exports to the Philippines, despite the imposition of tariffs or quantitative restrictions (QR).
“I don’t think so. They need us. Their markets are soft. Ours is the strongest market in the region tapos ililimit mo [then you will limit it]? Of course not. It doesn’t make sense. So yes, tuloy ’yan [the Thai auto exports will continue],” he said when asked if he expects Thailand to reduce auto exports to the country.
The Department of Trade and Industry (DTI) said last week it was looking at imposing tariffs or QR measures on vehicles imported from Thailand.
Trade Undersecretary Ceferino S. Rodolfo said this “retaliation” for Thailand’s noncompliance with a World Trade Organization (WTO) ruling on the valuation of Philippine cigarettes exported to Thailand. The trade department specifically chose the automotive sector which was Thailand’s biggest export volume to the Philippines.
GT Capital said 15% of its auto imports come from Toyota’s operations in Thailand.
However, GT Capital Auto Dealership Holdings, Inc. (GTCAD) Chairman Vicente Jose S. Socco said tariffs or QR measures on Thai auto imports may affect its business strategy next year.
“Of course, it will have an impact not only on us, but on Mitsubishi and other manufacturers importing from Thailand, being that Thailand is the biggest production base in ASEAN,” he told reporters.
He noted Toyota’s advantage is it also has production bases in the Philippines, Indonesia, Vietnam and Malaysia.
“If the government believes there’s some need to impose safeguard duties or use this as a retaliatory measure with Thailand, the government of course has that prerogative and we will comply as the government decides,” Mr. Socco said.
“But at the end of the day, what’s paramount is that we also understand that we’re trying to bring in the most competitively priced vehicles to the market and I think the government is also very much cognizant of that… The safeguard is very much contrary to the spirit of the ASEAN economic zone which promotes the free movement of goods,” he added.
The Philippines saw its highest monthly sales of motor vehicles for the year last month, selling 34,397 units to rise 3.8% from October 2018, data from the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) showed. Toyota had the biggest market share at 47.69%, equivalent to 16,403 vehicles sold in October.
Toyota also reported last week its net income in the first nine months of the year was up 13% to P7.3 billion. Parent GT Capital’s attributable net income stood at P15.33 billion for the nine months to grow 40% year on year. — Denise A. Valdez