Parts localization for car production remains the biggest challenge for the country’s automotive assemblers, particularly for the country’s largest car producer – Toyota Motor Philippines (TMP).
Masando Hashimoto, TMP president, said during the panel “Fast Talk with Foreign Investors: Investments Within our Borders Then and Now” at the ASEAN Editors and Economic Opinion Leaders Forum 2026 on Tuesday, February 24, to kickoff the Philippines chairship of ASEAN 2026.
“It’s been a heavily challenging matter for Toyota or the consumer manufacturers,” said Hashimoto.
A car comprises over 30,000 components and reducing the portion of imported parts will increase the sourcing local, enhancing the cost competitiveness.
However, Hashimoto said, this was a shared challenge not only for Toyota but its support supplier.
“This is because the base of the supply chain for auto parts in this country is not yet as mature as compared to Thailand,” he said.
At present, TMP sources 64 percent of its parts locally, higher than the 51 percent which was achieved at the start of the production back in 2018.
TMP explained that 64 percent localization rate refers to the Vios’ localized Body Shell Weight (BSW), which exceeds the government’s requirement of 50 percent under the CARS Program. This should not generalize the local capability of our entire local production, covering other models like the Innova and Tamaraw.
Still, TMP imports around 40 percent parts from Thailand and Indonesia.
Hashimoto, however, expressed appreciation to the government for consistently providing incentive schemes to support the local car assemblers to encourage parts manufacturing.
Despite the serious challenge, Hashimoto said they will continue to invest in the Philippines depending on the business.
Despite the serious challenge, Hashimoto said they will continue to invest in the Philippines depending on the business.
Globally, the Philippines is the top three ASEAN market for Toyota with a market share of 46 percent.
Toyota started its Philippine operation in 1988, almost 40 years ago. Toyota’s honorary chairman, Dr. Shoichiro Toyoda eventually partnered with Dr. George Ty of Metrobank, giving birth to TMP in August 1988.
