Toyota to raise price of Innova on higher costs
By Ma. Elisa P. Osorio Updated April 30, 2009 12:00 AM

MANILA, Philippines – Toyota Motor Philippines (TMP), the country’s largest automobile distributor, said the price of Innova may go up as a result of higher operational cost because the income tax holiday (ITH) being given by the government expired last March.

In an interview, TMP vice president Rommel Gutierrez said they have already asked the Board of Investments (BOI) for an extension of their four-year ITH to six years.

Gutierrez said that initially, BOI classified Innova as a non pioneer project. But given that it is an Asian vehicle, Gutierrez said that it can be re-classified as a pioneering project. Under the law, pioneer projects are given six years ITH, he said.

If the BOI does not grant their request, Gutierrez said the cost for producing the Innova will go up. Gutierrez said he is not certain as to how this will affect the product.

Innova is one of the two vehicles being produced in their Sta. Rosa plant. The other is Vios. Gutierrez said the ITH for the car is good for a couple more years.

Toyota has already reduced their production of Innova and Vios, the two vehicles assembled in their Sta. Rosa plant, by 10 percent. The move was done as a result of the slowdown in consumer demand worldwide.

Angel Dimalanta, president of the Automotive Industrial Workers Alliance (AIWA) said Toyota has removed one shift every week. Instead of producing Vios and Innova on their Laguna plant, Dimalanta said the workers were asked to do maintenance work.

Dimalanta said the Toyota Plant in Sta. Rosa operates five days a week. Each day is divided into two eight-hour shifts. He said one of the Monday shift has been cancelled since mid January.

According to Dimalanta, a total of 40 units are being produced each shift or 20 units of Innova and 20 units of Vios.

Before the cancellation of one of the Monday shifts, Dimalanta said the plant produces 400 units per week. He said he does not know till when the reduced shift will last. “There is no definite date. It will be like this until the market improves,” he said.

Target production for this year is 12,000 units.

When asked about the 10-percent reduction in production, Gutierrez said “our production continues with some rationalization of costs to manage our overhead.” Gutierrez refused to elaborate on the matter.
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