Car assemblers in the country may look into sourcing parts from local suppliers as productivity in manufacturing powerhouse China has slowed down due to the COVID-19 virus outbreak, Department of Trade and Industry (DTI) Secretary Ramon Lopez said.
Lopez said the COVID-19 outbreak can affect the supply chain of the local automotive industry.
“Just like people, companies cope up.”
“There will probably be challenge as to the supply chain, but just like people, companies cope up. They can do a backup strategy, sourcing from alternative sites as well. That can be in other parts of China or other parts of the world, including the Philippines,” Lopez said.
Although the effects of the production slowdown in China could be temporary, the trade chief urged car companies to increase the local content of vehicles that they assemble.
“Find local sources for any eventuality, not to rely on a single source.”
“Find local sources for any eventuality, not to rely on a single source. It’s like part of business continuity planning,” the trade head said.
Despite the setback in factory activities in China, the operation of Toyota Motors Philippines (TMP), the country’s largest automaker, remains normal.
TMP First Vice President Rommel Gutierrez said the company has not yet seen any impact in its operation from the slowdown in China due to COVID-19 because it has “enough stocks” of auto parts to continue the production.
TMP sources auto parts from Toyota’s regional affiliates, such as Indonesia, Malaysia, and Thailand, and these countries are the ones that are directly sourcing from China, he said.
Gutierrez, who is also the president of Chamber of Automotive Manufacturers of the Philippines Inc., said the industry group’s members have not reported any impact of the COVID-19 in their operations.