[MANILA] Toyota Motor Corp's partner in the Philippines said the carmaker may more than double local sales by 2020 as personal incomes rise in the Southeast Asian nation.
Toyota's deliveries in the country could grow by as much as 20 per cent a year, Carmelo Bautista, 58, president at GT Capital Holdings Inc, said in an interview. GT Capital, the investment company founded by Philippine billionaire George Ty, owns 51 per cent of Toyota Motor Philippines Corp, which boosted sales 40 per cent last year to 106,110 vehicles.
"You have a growing middle class," Mr Bautista said on May 28 in Manila. "Growth will taper off at some point, but sales will still climb."
Philippine vehicle sales have been rising steadily since 2011 and hit a record 234,747 units last year, as low interest rates and a growing economy boosted purchasing power. President Benigno Aquino approved an executive order that will offer tax breaks for six years to support three models in an effort to make the Philippines a regional carmaking hub, the Department of Trade and Industry said on Monday.
Toyota is the most popular car brand in the Philippines with a 39.4 per cent market share last year. Toyota Philippines plans to increase its dealerships to 60 next year from 45 in 2014, Mr Bautista said. He said the company may also add another production line.
"It would make sense to expand production here, because the local market is still growing, unlike in other parts of the region where either the market is shrinking or growth is slowing down," he said.
Per-capita gross domestic product in the Philippines rose to US$2,865 last year from US$1,851 in 2009, and the International Monetary Fund has estimated it could reach US$4,554 by 2020. Experience from other markets shows that spending on cars picks up when per-capita GDP reaches US$2,500 and "flattens" at US$5,000, Mr Bautista said.
Demand will also likely rise as political parties campaign for the national elections due in May next year, according to Mr Bautista.
Shares of GT Capital fell 1.5 per cent to 1,360 pesos at the close in Manila trading. The stock has rallied 32 per cent this year, the second-best performer on the Philippine Stock Exchange Index.