Mitsubishi mulls exporting CARS model
Toyota to focus on domestic market
Mitsubishi Motors Philippines Corp. (MMPC) is mulling the export of Mirage, its entry model in the CARS Program, to other ASEAN countries unlike its competitor Toyota Motor Philippines Corp. (TMP) which has decided that its Vios CARS model will cater to the Philippine market only.
MMPC Vice President Dante Santos told reporters that the potential exports of Mirage is something they will put on the table when they meet with the Board of Investments (BOI) for its periodic update of the CARS (Comprehensive Automotive Resurgence Strategy) program.
MMPC will formalize its verbal request for a meeting with the BOI where both parties have to report to each other on CARS Program.
“We will try to give them an update on how we’re mobilizing local parts makers support program, effects on economics of our pricing and any future problems and for all we know, we will start talking in depth about exports,” Santos said.
“We’re not saying we’re pushing this (export) but we have to put this on the table because we are undertaking periodic review already. This is a partnership between the government
and the private sector so we cannot act on something without BOI’s knowledge,” Santos added.
While the idea to export is still premature and its Japan principal has no knowledge about this plan yet, Santos also said that once MMPC decides to export they will certainly limit themselves to ASEAN countries where Mirage is not locally produced.
Santos was optimistic the BOI will have no objection to the possibility of exporting Mirage saying it is also “a dream of every company to export” and that it is “helping the country because we have high local content.”
Part of the MMPC’s consideration is if it would be more profitable to export stressing. Thus, they have to determine the procedures and the tax structures of the foreign market.
The CARS Program requires participants (MMPC and TMP) to produce 200,000 units over a six-year period, but it neither requires participants to export their products or some of it nor limit sales to the domestic market only.
Thus, they are also looking for every influencing element in the program and the government has also the obligation to report or update the MMPC of the country’s economic developments.
MMPC’s plan to export its locallyproduced Mirage does not mean that they are doubtful of the local market’s capability to absorb its 200,000 units of Mirage saying that the sales outlook is still positive.
The domestic motor vehicle industry has been experiencing negative sales this year. As of September, car sales declined by 18 percent. The industry expects to end the year with 14 percent decline in sales versus 2017.
But the industry was confident that 2019 will be a recovery year with 10 percent growth in sales.
In contrast to MMPC, TMP Vice President Rommel Gutierrez said that Vios will focus on the domestic market.
“Export is not part of our plan. We are not in the same position with MMPC as we just started in July this year,” Gutierrez said, noting that MMPC has also a different strategy. TMP ranks first in the local market followed by MMPC.
But Gutierrez vowed that TMP will comply with the requirements of the CARS Program saying they continue to believe that the domestic market can still absorb their local production.
TMP just started producing Vios in July this year. At 200,000 units over a sixyear period, a participant must produce 33,000 units on the average annually.
Gutierrez, however, pointed out that the weak market has affected all models, including Vios.
“We have to support the program to succeed. Vios is a priority model,” he stressed adding that just like MMPC, they too have regular updating with the BOI on the CARS program.
He also stressed that before any talks of CARS 2 Program, it is important that the first program is already successful.
To promote Vios, Gutierrez said that TMP’s marketing division has promos and discounts for the model. The new Vios is also equipped with new features, he said.