As 2021 draws to a close, many automobile brands in the Philippines are undoubtedly keeping their eyes on their sales numbers. This year was critical in every way for the auto industry, as many have already adapted to the “new normal” and hope to claw back the ground they lost in 2020.
Toyota Motor Philippines (TMP) may seem impervious as the number one automaker and importer in the Philippines, but as the saying goes: the bigger they are, the harder they fall. In the pre-pandemic years, TMP had it good. In 2017 (because of the excise tax fears) they sold 182k units, followed by a dip to 152k in 2018, and up again to 161k in 2019.
In 2020 they fell to just 99,545 units; a problem brought about by the immediate effects of the COVID-19 pandemic. To put the drop in perspective, the sales that Toyota lost in 2020 are more than the entire volume of Mitsubishi in that year.
But Toyota seems to be on course for recovery now. We were able to catch up with TMP President Atsuhiro Okamoto yesterday, and he says they are likely to achieve 129,000 unit sales. When we asked about what the target was, he said they set a modest recovery target of 130,000 for 2021. So all things considered, it's not bad.
Mind you, when a car company president generally talks about unit sales, it's on a wholesale basis meaning the sale between the importer/manufacturer/distributor to the retailer/dealer. But the numbers won't be too far off because no dealer would knowingly order more stocks than they can move quickly.
Okamoto says that the pandemic isn't really the issue anymore with automakers, but rather its after-effects. Work stoppages worldwide have made a significant impact on the supply chain of parts, which is why there are significant queues for certain imported vehicles like the Hilux, Corolla Cross, and the like.
The president of Toyota Motors Philippines also mentioned that they encountered challenges with financing as banks are significantly stricter with loan approvals and higher downpayment terms (e.g. 30%). It's understandable; given the economic uncertainty, banks are tighter when it comes to auto loans.
Okamoto was thankful that TMP had its own financial institution for loans in the form of Toyota Financial Services (TFS) but still emphasized that sales could be much better and recovery much faster.
Okamoto also stated that the backbone of their recovery in 2021 was their CKD units: Vios and Innova. Both combined for just over 50,000 units this year so far and accounts for about 37% of their volume. That's an increase compared to before as the TMP president says CKD used to cover about 33% of their volume.
The TMP president did make some important revelations to us, confirming a few new models for early next year. But we already wrote about those: the all-new Toyota Avanza as well as an entirely new model nameplate in the Toyota Raize crossover.