MANILA (Reuters) - The Philippine unit of Japan’s Toyota Motor Corp expects a 17-percent decrease in its output this year as higher excise taxes and consumer goods prices weigh on demand, its president said on Wednesday.
The Philippines, one of the fastest growing economies in Asia, is Toyota’s ninth largest market worldwide.
“The market has slowed down not only because of the impact of the excise tax increase, but also inflation having an impact on car customers,” Toyota Motor Philippines Corp President Satoru Suzuki told reporters.
Toyota Philippines will produce around 50,000 units this year, down nearly 17 percent from the record high 60,000 units in 2017, Suzuki said.
Toyota Philippines, the country’s top car manufacturer and seller, assembles Vios and Innova models in its facility south of the capital.
The Philippines’ car production, the second smallest in Southeast Asia, is less than a tenth of the output of top manufacturers Thailand and Indonesia.
Sales of motor vehicles among all automotive companies in the Philippines fell 12.5 percent to 171,590 units in the first half from a year ago, data from the ASEAN Automotive Federation showed. It is the second largest sales decline in the region, next only to Singapore’s 13.3-percent drop.
Car distributors attribute flagging sales to new excise taxes on automobiles that started this year and higher consumer prices, including oil.
“Our market now, I think, I can say, is very bad,” Suzuki said.
But sales and production will likely recover next year as the Philippine economy continues its expansion, he said.
Toyota Philippines is a joint venture of Toyota and Philippine conglomerate GT Capital Holdings Inc.
Reporting by Neil Jerome Morales; Editing by Alexandra Hudson