TOYOTA MOTORS Philippines Corp. (TMP) said it is “worried” about the possible imposition of safeguard measures on imported cars, noting the possible impact on sales volumes, but added it still plans to proceed with a major investment pending more clarity on the government’s intentions.
“We are worried because that is against free trade,” TMP President Satoru Suzuki said.
“(It is) anti-free trade if they proceed. We are worried. I don’t know what the government will do but if they stop the importation or charge higher tariffs, definitely our sales volume will drop.”
The Department of Trade and Industry is currently considering an application from a labor group for the imposition of safeguard measures on imported vehicles.
The Philippine Metalworkers Alliance submitted an application for an investigation to impose possible safeguard measures, citing a link between increasing vehicle imports and declining employment in the automotive industry.
World Trade Organization rules allow governments to impose safeguard duties if imports are found to have damaged domestic industry.
TMP is investing P4.5 billion in a new hub in Luzon, to expand beyond its Santa Rosa, Laguna stockyard which can accommodate 4,000-5,000 vehicles.
“Our sales volume is expanding more and more so sooner or later our stockyard will overflow… we need something new,” Mr. Suzuki said.
If the safeguard measures are implemented, Mr. Suzuki said TMP would have invested in “property which we don’t need.”
The new Luzon hub is expected to be operational by late 2020.
Mr. Suzuki said TMP will proceed with the Luzon hub investment, as he is not convinced that the government will implement the safeguard measures.
TMP plans to discuss the matter with the trade department through the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI).
Meanwhile, TMP Chairman Alfred V. Ty said he expects at least single-digit sales growth for TMP in 2019.
“I hope this momentum will be positive for next year,” he said.
He is cautiously optimistic about TMP sales growth next year.
“I think — not to dwell on the past — but last year because of the inflation scare that really led to a big slowdown until the first quarter of this year. Then we tried to regain and stimulate the market,” he said.
“Next year I think we also have to be aware of the region… we cannot just be moving on our own here in the Philippines and disregard what’s going outside. But nevertheless, cautious optimism is still optimism.” — Jenina P. Ibañez
