GETTING A REBOOT ‘GLOBAL COMPANY’
Mitsubishi in the Philippines is in a stage of “second establishment,” according to the brand’s global chief
OSAMU MASUKO, president and CEO of Mitsubishi Motors Corporation (MMC), during a Nov. 9 meeting held at the company’s Tokyo headquarters called Mitsubishi Motors Philippines Corporation’s (MMPC) entry into a new government car-making program as a “second establishment” for the brand.
“It’s a starting point,” Mr. Masuko said regarding MMPC’s acceptance in the Philippines’ Comprehensive Automotive Resurgence Strategy ( CARS) program.
On Oct. 25 MMC signed a Letter of Intent with DTI Secretary Ramon M. Lopez during a meeting attended by President Rodrigo R. Duterte. The agreement paves the way for MMPC to expand its production capabilities, including sourcing more parts from local producers, as well as increasing its workforce.
All this is linked to CARS, in which MMPC is one of two domestic car makers (the other being Toyota Motor Philippines) that qualified for the program’s production volume requirement of 200,000 units per enrolled model over the course of six years. At present, only two of the three models allowed in CARS — which dangles fiscal incentives to local car makers — are enrolled in the program.
MMPC’s bet in CARS is the Mirage G4 mini sedan and the model’s hatchback version. Mr. Masuko said that MMPC has invested P4.3 billion so it could expand its assembly line for passenger cars to 50,000 units annually, as well as build a new stamping plant. Production of the Mirage G4 will start in January 2017, with that of the model’s hatchback variant to follow at a yet undetermined time. The stamping plant is scheduled to be operational in January 2018. OSAMU MASUKO, head of Mitsubishi Motors Corporation, speaks about the potential of the Philippine market and the brand’s role in the Nissan-Renault Alliance during a meeting held at the company’s boardroom in Tokyo.
“We would like to contribute to the development of the automotive industry in the Philippines through promotion of local production, expansion of local parts procurement and promotion of employment,” Mr. Masuko said, noting that MMPC had already added 400 workers to its previous 1,000- strong labor force in anticipation of the Mirage G4’s assembly. Another 100 employees will be hired for the stamping plant, according to the executive.
Mr. Masuko admitted that the Philippine production numbers are nominal when compared to those logged by other car-building countries in Southeast Asia — like Thailand and Indonesia.
Data from the ASEAN Automotive Federation places Thailand’s Jan. - Aug. production at more than 1.3 million vehicles and Indonesia at 775,395 — far more than the Philippine output of 73,897 units during the same eight-month period. This, however, does not deter the executive’s enthusiasm at pursuing Mitsubishi’s business in the country.
“The volume is low; that means we can grow,” Mr. Masuko said. He also shared that “in future, cars built in the Philippines will be exported.”
Citing the country’s large and young population — meaning a huge potential market to service — for the optimism, the Mitsubishi chief said that “compared to Japan, the Philippines has a much brighter future.”
Recent developments at Mitsubishi Motors parallel MMPC’s “second establishment.” While MMPC had suffered its own woes in the wake of consumer complaints against supposed runaway (previous generation) Mitsubishi Montero Sport models — MMPC President and CEO Yoshiaki Kato bared on the sidelines of the Tokyo meeting that tests conducted by the UK-based vehicle testing company Horiba Mira found no flaw in the Montero Sport, the 130-page report for which has already been submitted for evaluation to the DTI — the global company for its part admitted to releasing flawed fuel economy data that, according to a Reuters report in May, has led to a $3-billion loss in the company’s market value.
But a recently bolstered partnership deal in which Nissan Motor Co. secured a controlling 34% share in MMC — the largest slice for a single stakeholder — through a $ 2.3- billion infusion has steadied Mitsubishi’s position. The deal that was officially confirmed on Oct. 20 effectively makes MMC a part of the NissanRenault Alliance, and the threeway partnership immediately landed the members among the world’s top three automotive groups in terms of volume.
Mr. Masuko explained the alliance, as the case has always been between Nissan and Renault, will “respect” each company’s brand history and management autonomy, separating each one’s marketing and sales efforts while aiming for “greater synergy impact” in financial management, parts procurement, vehicle platform and advanced technology development, and other areas.
“It’s best if we can ‘commonize’ platforms, centralize procurement, and develop new technologies,” Mr. Masuko said.
The alliance also puts the group in a “well-balanced” position worldwide as each company enjoys a strong presence in different markets, according to the executive, citing that “Nissan is strong in North America, Renault in Europe, and Mitsubishi in Southeast Asia.”
“I believe we will be a more global company [ because of this],” Mr. Masuko said. —