Toyota sales may double in four Asian markets

Toyota sales may double in four Asian markets

SINGAPORE (Bloomberg): Toyota Motor Corp. expects vehicle sales in four of the largest markets in Southeast Asia to almost double by 2005, aided by fast economic growth, lower tariffs and increased competition among automakers.

Asia's largest automaker estimates total demand for vehicles in Thailand, Indonesia, Malaysia and the Philippines will grow 88 percent to about 1.7 million units in 2005, from 900,000 in 2000, according to Hirofumi Fujise, a spokesman for Toyota Motor Management Services Singapore Pte., or TMSS.

The world's biggest automakers, including General Motors Corp. and DaimlerChrysler AG, predict growth in Asian demand will outpace that of North America and Europe. Plans by member countries of the Association of Southeast Asian Nations to slash tariffs on auto parts and vehicles will add to the region's allure for carmakers, analysts said.

"We're totally aware that our rivals will really move into the market especially after tariff restrictions get lighter," said Fujise, in an interview. "We just have to keep on trying to expand and increase business in the region."

As part of a 1998 agreement by ASEAN, the grouping's four main markets will cut automotive-related tariffs to a maximum of 5 percent by 2005, down from 50 percent, provided the trade involves automakers and suppliers located in the region.

For automakers to qualify for the benefits, set to begin as early as 2003, at least 40 percent of a vehicle's components have to be manufactured in an ASEAN country before the vehicle can be exported.

"I'm not too worried about Toyota in the region," said Shu Nung Lee, a senior auto analyst at Lehman Brothers Japan Inc. "Toyota had a huge head start in terms of assembling and supply bases in Asia -- it knows more about the market than other makers."

Toyota has been expanding operations steadily in ASEAN markets, opening 10 manufacturing units there since the late 1960s. Japan's largest automaker had a market share in the region of about 20 percent in 1999. Automakers' success worldwide is becoming more dependent on how well they succeed in the Asia- Pacific region, companies and analysts said.