TOYOTA Motor Philippines Corp. (TMP) is projecting a potential 5% growth in auto parts exports next year as demand recovers in other countries, a company official said.

“If next year it will increase, more or less… it will be 5%,” TMP First Vice-President for Purchasing Richard B. Valdez told reporters on Tuesday.

Exports are so far flat this year, he noted. “Every year, at least we would like to increase, but that will still depend on the sales of other countries.”

In 2023, the Toyota group accounted for 30% or $1.26 billion of the total Philippine auto parts exports. These represented $665 million in export revenues.

However, the car manufacturer’s share in the auto parts exports that year was lower than 33% a year prior.

“It’s a little bit down because since we are exporting, these (represent) the sales of other countries like Thailand and other ASEAN (Association of Southeast Asian Nations) markets,” Mr. Valdez said.

There are lower sales in other markets due to issues with financing as interest rates remain elevated, he noted.

Data from the ASEAN Automotive Federation (AAF) showed that motor vehicle sales in Thailand declined 9% to 775,780 units last year.

Meanwhile, Thailand’s motor vehicle sales from January to September dropped 23.5% to 438,303 units.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said it is possible for the country’s total auto parts exports to increase next year.

“This is consistent with the fact that the Philippines is one of the fastest growing in vehicle sales and production in ASEAN in recent years,” he said.

AAF statistics showed that Philippine motor vehicle production grew 18.3% in the January-to-September period to 97,139 units. It was the second-fastest in the region.

Meanwhile, a joint report by the Chamber of Automotive Manufacturers of the Philippines, Inc. and Truck Manufacturers Association showed that auto sales grew 8.9% to 384,310 units as of October.

Mr. Ricafort added that since Toyota is one of the world’s biggest automakers, it is possible for the company to further diversify its global supply chains.

“It will be prudent for them to diversify the auto parts exported from the Philippines to the rest of [its] production facilities worldwide,” he said.

In 2016, TMP established Toyota Motor Philippines Logistics, Inc. (TLI) to strengthen its indirect exports of OEM (original equipment manufacturer) and aftermarket parts and accessories to Toyota’s global network.

As of the end of 2023, TLI has 13 indirect export suppliers, which generate around $200 million annually.

According to Mr. Valdez, the top destinations for Philippine-made parts last year were Thailand, South Africa, Brazil, Taiwan, and India. — Justine Irish D. Tabile