MITSUBISHI Motor Philippines Corp. (MMPC) may invest another P2 billion in its newly inaugurated facility in Santa Rosa, Laguna, as it hopes that the Comprehensive Automotive Resurgence Strategy (CARS) Program will gain approval this year.
This is according to a high-ranking official in the local unit of the Japanese car brand who asked not to be named.
The firm has already spent P3 billion on the machinery and equipment for its newly acquired and refurbished manufacturing facility in Santa Rosa, previously owned by Ford.
The additional investment, said the source, is for a stamping facility for the car’s body panels but will only be invested after the executive order (EO) is inked. As for Malacañang, Cabinet Secretary Jose Rene Almendras hinted that the long-overdue EO operationalizing the CARS Program is undergoing “finishing touches.”
The CARS Program details the fiscal and nonfiscal incentives that the automotive industry may avail itself of in order to lower the cost of locally produced vehicles in the country, and boost local production volume. About 70 percent of vehicles sold in the local market are imported, as bringing in cars, especially if made in other Asean nations, is more cost effective than assembling the vehicles locally.
Total automotive sales in 2014 was pegged at 270,000 units, of which only 60,000 to 70,000 were locally made.
The Chamber of Automotive Manufacturers of the Philippines Inc. earlier said the average cost gap between making a vehicle in the Philippines versus making the same unit in another car-producing country, such as Thailand, is at $1,000 per unit.
To bridge the gap, the Department of Trade and Industry has been crafting the CARS Program, part of which will entail the government’s doling out $600 million via the national budget. However, the government has yet to decide on the form that the incentives will take.
The urgency of the Philippine government’s auto program has been emphasized by no less than the Chairman of Mitsubishi Corp., Osamu Masuko in his speech during the inauguration of the 21-hectare facility.
“This is the most important market in Asean for our company. Therefore we made the big decision on the new factory here. We greatly expect the Philippine government to take some initiative to sustain the growth of the automotive industry, especially local production business,” said Masuko during his speech.
During the press conference with members of the media, Masuko noted that they will assess whether it is better if government provides a direct incentive for consumers or an incentive for the car companies, but support is needed nonetheless.
Top Japanese officials of Mitsubishi Motor Corp. were also present during the inauguration, as well as executives of other local car companies.
The Sta. Rosa facility, which produces the L300 and the Adventure, can produce 50,000 units annually and will employ as much as 1500 workers.
MMPC aims to reach 100,000 units in sales by 2020. The car company is longest operating car manufacturer in the Philippines.
Image credits: Malacañang Photo