Vios and Innova production started in the Philippines

The Santa Rosa Plant was constructed in the Philippines as the passenger car plant of Toyota Motor Philippines Corporation (TMP) and began producing the Corolla in January 1997. As a result, TMP's annual production capacity including existing plants rose to the 60,000 unit level. In 1998, however, production volume decreased to the 10,000 unit level, about one-third the volume of the previous year, as a result of the currency crisis.

Even so, the effects of the currency crisis were relatively minor in the Philippines compared to Thailand and Indonesia. Regional tariffs were reduced in January 2003 in accordance with ASEAN rules, and regulations on domestic production were abolished pursuant to a demand by the WTO to the Philippines. Excise taxes, however, were revised, and the taxes on multi-purpose vehicles such as Toyota's Tamaraw utility vehicle were increased while those on passenger cars and small SUVs decreased, resulting in higher in-region imports of the vehicles subject to lower taxes. As a result, Toyota's production in the Philippines focused on two series-the Vios and the Innova-and a switch was made to imports from Thailand for other series.

In 2008, the Japan-Philippines Economic Partnership Agreement (EPA) took effect and import duties on completely built vehicles from Japan were reduced. In response, five Philippine automakers including Toyota and members companies of the Motor Vehicle Parts Manufacturers Association of the Philippines established the Philippine Automotive Competitiveness Council Inc. in 2009.

Toyota Autoparts Philippines Inc. (TAP), a Philippine-based parts manufacturer, was positioned as a supply base for transmissions used on IMV series vehicles. In 2006 TAP manufactured 180,000 transmissions of which 170,000 were exported to 10 countries and regions including Thailand and Indonesia. In addition, TAP began production of the R-type transmission in 2008, and total annual production capacity was increased from 150,000 units to 330,000 units.

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