Getting a reboot
by BusinessWorld Online

Posted on November 24, 2016

Mitsubishi Motors showroom at the company’s global headquarters in downtown Tokyo, Japan. -- All Photos: Brian M. Afuang

“It’s a starting point,” Mr. Masuko said regarding MMPC’s acceptance in the Philippines’ Comprehensive Automotive Resurgence Strategy (CARS) program.

On Oct. 25 MMC signed a Letter of Intent with DTI Secretary Ramon M. Lopez during a meeting attended by President Rodrigo R. Duterte. The agreement paves the way for MMPC to expand its production capabilities, including sourcing more parts from local producers, as well as increasing its workforce.

All this is linked to CARS, in which MMPC is one of two domestic car makers (the other being Toyota Motor Philippines) that qualified for the program’s production volume requirement of 200,000 units per enrolled model over the course of six years. At present, only two of the three models allowed in CARS -- which dangles fiscal incentives to local car makers -- are enrolled in the program.

MMPC’s bet in CARS is the Mirage G4 mini sedan and the model’s hatchback version. Mr. Masuko said that MMPC has invested P4.3 billion so it could expand its assembly line for passenger cars to 50,000 units annually, as well as build a new stamping plant. Production of the Mirage G4 will start in January 2017, with that of the model’s hatchback variant to follow at a yet undetermined time. The stamping plant is scheduled to be operational in January 2018.

“We would like to contribute to the development of the automotive industry in the Philippines through promotion of local production, expansion of local parts procurement and promotion of employment,” Mr. Masuko said, noting that MMPC had already added 400 workers to its previous 1,000-strong labor force in anticipation of the Mirage G4’s assembly. Another 100 employees will be hired for the stamping plant, according to the executive.”

Mr. Masuko admitted that the Philippine production numbers are nominal when compared to those logged by other car-building countries in Southeast Asia -- like Thailand and Indonesia.

Data from the ASEAN Automotive Federation places Thailand’s Jan. -- Aug. production at more than 1.3 million vehicles and Indonesia at 775,395 -- far more than the Philippine output of 73,897 units during the same eight-month period. This, however, does not deter the executive’s enthusiasm at pursuing Mitsubishi’s business in the country.

“The volume is low; that means we can grow,” Mr. Masuko said. He also shared that “in future, cars built in the Philippines will be exported.”

Citing the country’s large and young population -- meaning a huge potential market to service -- for the optimism, the Mitsubishi chief said that “compared to Japan, the Philippines has a much brighter future.”

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