Toyota Continues Car Manufacturing in the Philippines While Honda and Nissan Pulled Out

In the Philippines, with major automakers advancing product strategies that rely on imported vehicles from Thailand and Indonesia, efforts to expand local production have only made little progress. On the contrary, the outbreak of the new coronavirus and the resulting restrictions prompted some automakers to end production in the Philippines. Following Honda’s plant closure in 2020, Nissan announced in January 2021 that it would end production outsourced to two local companies in March of the same year. Although the Philippines remains a supply hub of transmissions for Japanese automakers in ASEAN, its role as a vehicle production base for the local market is shrinking.

In response to this trend, the Department of Trade and Industry (DTI) introduced a provisional safeguard measure on imported vehicles in February 2021. By imposing additional tariffs on passenger cars and light commercial vehicles, the government intended to curb vehicle importation. However, in August 2021, DTI ended additional tariffs following the ruling of the Tariff Commission (TC) over the removal of safeguard duties on imported vehicles.

Meanwhile, the Philippines continues promoting local vehicle production through the Comprehensive Automotive Resurgence Strategy (CARS) program. As of September 2021, the Philippine government was considering extending the period of the CARS program which requires automakers to produce 200,000 units within six years after the production start of the target model. The extension is intended to give more time to Toyota and Mitsubishi, the only two manufacturers that participate in the program, to realize the required target. The combined production volume of the two companies was only 147,000 units as of the end of May 2021.

Philippines: New Laws and Regulations on Automobile Production (2021)

Suspension of production due to coronavirus restrictions

・From August 6 to 20, 2021, Laguna province, where automobile production bases are concentrated, was placed under the strictest level of coronavirus restrictions to prevent further spread of the virus. As a result, automobile production was also suspended. - According to media sources, Toyota, the largest local producer, has reduced daily production by about 200 units due to the measure. - On August 21, 2021, restrictions were scaled back to the second strictest level in Laguna and other provinces, allowing automakers to restart production.

Measures related to local automobile production

・In August 2021, the Department of Trade and Industry (DTI) ended provisional safeguard duties on imported passenger cars and light commercial -Provisional safeguard measures were applied to imports of passenger cars and light commercial vehicles starting from February 2021 in response to an increase in vehicle imports. ・As of September 2021, the Philippine government was considering extending the period of the Comprehensive Automotive Resurgence Strategy (CARS) program. - Two Japanese automakers Toyota (Vios) and Mitsubishi (Mirage and Mirage G4) participate in the CARS program. Each participant is required to produce 200,000 units within six years after the start of production of the target model, but the total production volume of both companies was only 147,000 units as of the end of May 2021. For this reason, DTI has requested to extend the period for automakers to comply with commitments under the program. (Created using Philippine government materials and various media sources)

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