Toyota, Mitsubishi target 50% local content for Vios, Mirage

The local units of Japanese car giants Toyota and Mitsubishi plan to bump up to 50 percent the local content of their car models enrolled under the government’s Comprehensive Automotive Resurgence Strategy (CARS) program.

This means half of the parts and components of the Mitsubishi Mirage and Toyota Vios to be assembled locally are Filipino made.

The plan is seen not only to bolster Filipinos’ capability in producing car parts but also bolster the country’s bid to be a regional automotive manufacturing hub.

“With the participation of our local suppliers, we are targeting 50 percent local content. To be able to do that, they have to make certain trade tie-ups with foreign companies to bring in the technology which is good for our product,” Mitsubishi Motors Philippines Corp. first vice president Dante Santos said.

“For Toyota, we are also targeting to achieve 50 percent local content,” Toyota Motor Philippines Corp. president Satoru Suzuki said separately.

Mitsubishi and Toyota are the two participating car makers in the CARS program, a scheme initially targeted to accommodate three participants.

The CARS program, approved under the administration of former president Benigno Aquino III, seeks to encourage local car assembly through incentives and allow industry players become more competitive.

Under the program, local car assemblers may apply for fiscal support not exceeding P27 billion by locally assembling three vehicle models, or P9 billion per model, with a commitment to produce 200,000 units for each model during its six-year model life.

The fiscal support will be given in the form of tax payment certificates to be used to defray the participating car companies’ tax and duty obligations.

“Toyota’s stance has always been manufacturing vehicles with a view to developing local industry and contributing to the betterment of society in its host country. Our resolve to push the expansion of local manufacturing capabilities became even stronger with the CARS Program,” Suzuki said.

“This is why after almost three decades of production operations in the Philippines, Toyota is taking on the challenge of participating in the CARS program to support the Philippine government’s thrust to revitalize the manufacturing sector. Strengthening parts manufacturing is at the core of Toyota’s CARS project. Investments in new parts manufacturing capability constitute a significant portion of our investments, which has already reached P5.24 billion as of September 2017,” he added.

Mitsubishi, for its part, is launching its biggest and most modern stamping plant in the country worth P2.4 billion by next year.

“Local content is a factor of business decision. If a company can do it, they will. However, any item put on that vehicle has a patent,” Santos said.

“Also you really cannot make it (local content to at least) 70 percent because there are no manufacturers of items such as engine, transmission, and tires here,” he added.