Mitsubishi PH joins CARS program with initial investment of 4.3 billion

Mitsubishi Motors Philippines Corp. (MMPC) takes the bait and is the first local car maker to join the government’s CARS (Comprehensive Automotive Resurgence Strategy) Program to expand the country’s motor vehicle industry and eventually become a competitive regional hub.

MMPC is investing 4.3 billion for the first phase production of the compact, hatchback and sedan Mirage model next year at its Sta. Rosa, Laguna manufacturing facility. The current capacity of the plant – formerly owned by Ford Motor Philippines – is 50,000 units per year. Osamo Masuko, Mitsubishi Motors Corp. (MMC) chairman and CEO, in town to formally announce its participation to CARS, has long believed that the Philippines has a strong growth trend that could position it as one of the most important automotive markets in ASEAN as far as MMC of Japan, the parent company of MMPC, is concerned.

“Looking at market trrends we can introduce new models and target 100,000 units of production (in the future),” Masuko told reporters during the press announcement late Wednesday. “(More) investments will be necessary (especially) if in the future (sales) is going well. Right now it is a good time to invest in the CARS.”

Masuko said when their CARS application is accepted by the government they will immediately start to expand employment opportunities and buildup its production capacity.

Masuko said they will produce 30,000 to 50,000 units (two shifts) of the participated model and increase employment by 700 jobs on the first year. From the parts suppliers’ side, this will entail an additional 3,000 to 4,000 fresh employment.

Part of the 4.3-billion investments will be spent for a stamping facility and for the increase of local content link. “The (stamping facility) that’s going to be a big facility, also metal and sheet parts, that’s the biggest investment, as well as the assembly line and trimming line (which) we will add further,” Masuko added. Masuko formally met with President Aquino last Wednesday as they expressed their interest to file for a CARS participation. He said as the region integrates and trade flows more freely, the Philippine economic growth remains one of the more promising stories.

“Further economic growth is forecasted,” said Masuko. “I believe competition among ASEAN countries will become even more severe but the Philippines has an extremely high potential for growth. It’s a good timing to announce the CARS program and this time many parts suppliers will also make new investments and expand employment in the country.”

“(It’s my) strong belief that automotive (sector) can make a big (impact) on the economic development of the Philippines,” he added.

Masuko also stressed the necessity of the Philippines as a car manufacturing hub in the future and if the CARS Program succeeds, the possibility of exporting local cars is not far-fetched.

“It’s necessary that a country has to produce its own vehicle,” said Masuko. “Price wise and quality, if its (sufficient) – we can import cars from the Philippines, it’s a first step. In the future, with continued cooperation with government, the Philippines can catch up with countries who are ahead in the automotive sector.”

The government’s CARS Program includes a $600-million tax perks to the three participating car makers or PCM qualified which has the capacity to manufacture 200,000 vehicles over a six-year period. It is supposed to jumpstart the local automotive sector growth and expand it to becoming a regional hub.