MANILA, Philippines – Tokyo-based Global Conglomerate Mitsubishi Corporation announced plans to invest P4.3 billion ($90.63 million) in order to start the production of both the hatchback and sedan versions of its sub-compact model Mirage in the country starting early 2017.
Mitsubishi Corporation Chairman and CEO Osamu Masuko said that the move is part of efforts to participate in the government’s new P27 billion ($600 million) CARS Program.
“I had the opportunity to meet his Excellency, President Aquino earlier today and have expressed Mitsubishi Motors Corporation’s (MMC) determination to participate in the the CARS program. We will immediately file an application to join,” Masuko said in a briefing following his meeting with the President on Wednesday, February 10.
Both sedan and hatchback variants of the Mirage will be built at the firm’s recently refurbished Sta. Rosa, Laguna, plant with the investment going towards increasing local content in order to meet CARS requirements.
“The P4.3 billion investment going towards a stamping facility as the first phase in order to increase local content rate and to further invest and expand employment opportunities responding to the build-up of production capacity,” Masuko said.
The CARS Program calls for fiscal and non-fiscal incentives to jumpstart the revitalization of the country’s automotive industry and make it more competitive in the region. It requires automakers to develop at least 200,000 cars locally, which Mitsubishi intends to achieve by focusing on smaller vehicles.
Creating new jobs
Accompanying Masuko in his meeting with President Aquino were the heads of 20 top car parts suppliers, all of whom, he said, have decided to enter the Philippine market.
These included heads of notable firms such as Denso and Yazaki corporation
These parts suppliers will contribute to the development of the automotive industry in the Philippines through the construction of new plants, expansion of existing production bases and providing technology to local firms, Masuko said.
Masuko said that the firm’s new investment will directly lead to 700 new jobs initially.
Masuko estimated that the different tiers of parts suppliers coming in will create an additional 3,000 jobs.
Good timing for CARS
Masuko said that the decision to invest more was taken because of the advantageous position the country finds itself in economically and with a growing population to boot.
Mitsubishi is the country’s second largest automotive firm in terms of sales accounting for about 18% of the local auto market behind only Toyota.
The automaker earlier disclosed that it sold 4,867 units in January of this year, representing growth 14% from December 2015 and 50% higher than the same month last year.
The investment comes at a time when the local automotive industry is expanding rapidly buoyed by strong sales.
Last year, vehicle sales in the Philippines rose by 23% topping off at a record 288,609 units last year, based on data from the Chamber of Automotive Manufacturers of the Philippines Incorporated (CAMPI).
“It was very good timing for the government to announce the CARS program. This time I think many parts suppliers will make investments in the country given that the country is blseed with a high quality workforce with a good degree of English,” Masuko said.
He added that “among ASEAN members, we see the Philippines as having extremely high potential for growth.”
Masuko also pointed out that the recently inaugurated ASEAN Economic Community (AEC) will strengthen competition among member nations as it allows for the tariff free movement of goods.
He said that although neighbors, notably Thailand and Indonesia, have a headstart in terms of automotive production, the Philippines’ stable growth will help close the gap.
Building an industry
Board of Investments (BOI) Governor Henry Co echoed this sentiment, saying that “the country has had a number of missteps in the past but it’s going to be exciting moving forward now that we have a government that supports it.”
Co warned however that building an industry takes time, measured in the decades, and will not be achieved in just 6 years, the length of time of the CARS Program.
“It’s not about trying to build a car, its about trying to build capability and trying to create jobs. That’s what CARS is all about. We’re trying to harvest what we can get while trying to do that,” he explained. – Rappler.com
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