Toyota Group's automotive component exports from the Philippines declined in value by nearly 8% year on year (y/y), according to Richard Valdez, vice-president for purchasing division at Toyota Motor Philippines Corporation, as reported by the Philippine Star. Auto component exports had a total value of USD820 million in 2015, down from USD890 million the previous year. Exports declined as a result of sluggish new vehicle demand in two of the company's biggest markets: Thailand and Indonesia. "The picture is that the ASEAN [Association of Southeast Asian Nations], especially Thailand and Indonesia, is seeing a big drop in [new vehicle] sales and that's why the bulk of the [automotive component] exports [of the Toyota suppliers] like transmission and wiring harness went down as well," he added.
Significance: Toyota Auto Parts is the automaker's component-manufacturing arm in the Philippines and is responsible for the bulk of its exports. The group exports nearly 95% of its component products to Toyota's assembly plants worldwide, in countries including India, Indonesia, Japan, Malaysia, Pakistan, South Africa, Taiwan, Thailand, the United States, Venezuela, and Vietnam, while 5% of the output is used by Toyota's Philippine facility. The group exports automotive parts such as transmissions, constant velocity joints, wiring harnesses, meter assemblies, and switches from Toyota Philippines' Santa Rosa facility in Laguna. For 2016, the automaker expects flat automotive component shipments as the slowdown in vehicle demand in its top export markets is expected to continue. Nevertheless, the company should see demand pick up in the short term, as the Philippine government is finalising an automotive roadmap, aimed at lifting domestic vehicle manufacturing operations in the country. Toyota is one of two companies to have already signed up, and is mulling a JPY1 billion (USD8.3 million) initial investment for the programme.
