Martin Aguilar / Brent Co | February 10, 2016 19:00
MMC intends to join the CARS program with proposed investment
Mitsubishi Motors Philippines Corporation (MMPC) is proposing an investment of PhP 4.3 billion as its participation in the Comprehensive Automotive Resurgence Strategy (CARS) program.
Under the CARS program, MMPC plans to locally produce the Mirage hatchback and the Mirage G4 sedan, in addition to the the Adventure and the L300 models it currently produces. If MMPC manage to join in the CARS program, the company could locally produce the said vehicles in its production plant in Santa Rosa, Laguna and will be able to export the locally produced vehicles to other ASEAN markets, becoming a production hub and increasing the company's vehicle sales.
During the press conference, Mitsubishi Motors Corporation (MMC) CEO Osamu Masuko said that the company "see the Philippines to have a high potential for growth" which is a "very good time to announce the CARS program."
With the CARS program, MMC CEO Masuko said that the CARS program will generate 700 new jobs during the first phase of the program. Masuko also said that the number of new jobs will gradually increase as the program enters succeeding phase. He added that I.T. related jobs will also rise in the Philippines through the CARS program.
Mitsubishi targets to produce 25,000 to 30,000 units per 1 shift in 2017 and intends to expand its production to 100,000 units per year.
MMPC’s joint venture with Asian Transmission Corporation currently exports 5,500 manual transmission units to Thailand monthly.
Sojitz and BDO supports MMPC in its push to join the CARS program. Sojitz and BDO will financial support MMPC in order to sustain its operation.
MMC CEO Masuko added that the Philippine government is very supportive of the automotive industry. Masuko believes that the "time has come for the Philippines to be competitive in the ASEAN region."
MMPC is one of two automakers eyeing the CARS program. Toyota Motors Philippines Corp. also wants to join the CARS program and the company is pushing the Vios, its best-selling model, for mass production. The current number one automotive company in the Philippines, Toyota, said it will invest more than 1 billion Yen (around PhP 413.4 million) to prepare for the program before the actual production starts.
Submission of entries for the CARS program beneficiaries will be until March 15, 2016.
The CARS program aims to boost the Philippine automotive sector and revitalize the country's competitiveness in the ASEAN region. The said program is expected to generate economic activity worth around PhP 300 billion and at least 1.7-percent growth in the national GDP (gross domestic product).
Last December 2015, the Board of Investments (BOI) has issued the implementing rules and regulations (IRR) for the CARS program. According to the BOI, prospective local car assemblers may apply for fiscal support not exceeding PhP 27 billion by locally producing three vehicle models or PhP 9 billion per model. Each participant is given six years to produce 200,000 units each.
Through the CARS program, the BOI expects the Philippine automotive industry to generate USD 1.2 billion (around PhP 57.1 billion) in new investments. The program also targets to generate 200,000 new jobs, increase vehicle sales to USD 9.2 billion (about PhP 437.5 billion) and implement industry regulations that will boost the local automotive industry.
The CARS program also calls for new investments in parts manufacturing such as large car body panels, bumpers, instrument panels, headlamps, shock absorbers, plastic fuel tanks, automotive fabric and others.