Temporarily phasing out L300, Adventure models
MITSUBISHI Motors Philippines Corp. (MMPC), the country’s second leading automotive firm, will begin mass producing the Mirage domestically by January next year under the government’s Comprehensive Automotive Resurgence Strategy (CARS) Program.
At the same time, MMPC will temporarily phase out the local production of model units Adventure and L300, company officials said at a press briefing following the groundbreaking of its new stamping plant.
MMPC president Yoshiaki Kato and first vice president Froilan Dytianquin both said Mitsubishi will phase out the L300 and Adventure so that they can make engine upgrades that can accommodate Euro 4-compliant fuel.
The current engines of the two models can only handle Euro-2 fuels.
The Philippine government is requiring oil companies to sell only Euro 4 fuels by 2018, which are 10 times cleaner with lower levels of sulfur and benzene.
Dytianquin and Renato S. Lampano, MMPC vice president for business planning and public relations, said the company’s local production will focus on the Mirage starting January 2017 to comply with the government requirements under the CARS Program.
MMPC was recently approved to participate in the six-year CARS Program, under which it must locally mass produce its volume model unit Mirage – both the hatchback and sedan variants — to 200,000 units.
Lampano said the local production of the L300 and Adventure models will likely be phased out next year. He did not say when MMPC will remake the two models again.
But Dytianquin said the two models will be replaced. He said “a new model unit” sourced from Indonesia will replace the Adventure while the L300 will be replaced by the L200 of Thailand.
MMPC is investing P4.3 billion for local production under the CARS Program, P2 billion of which will go to its stamping facility which makes big body shells for the Mirage.
At present, Kato said Mirage body parts sourced locally comprise around 30-35 percent of the whole unit, but with the new stamping facility — which is expected to be fully operational by January 2018 — local content of Mirage is targeted to hit 50 percent.
He said mass production of the Mirage will start in January next year so they have to import body shells before the stamping facility is completed in 2018.
With its participation in the CARS Program, MMPC’s manpower is expected to increase to 1,832 workers by 2022 from 956 at present.
The CARS Program provides for incentives which may be given in two parts: after the fixed investments or after the production of not less than 100,000 units.
Dytianquin said the company is studying whether it would be possible to reduce the price of the Mirage. “We plan to maintain the prices [of the Mirage]. The incentives, they can come later as discounts to customers. There’s a possibility,” he added.
MMPC earlier said it is likely to produce more than 30,000 units of Mirage per year, but is expecting to initially manufacture only 20,000 units in 2017.
Now on its 53rd year in the Philippines, MMPC has already produced more than 600,000 units in the country through its Cainta and Santa Rosa Laguna facilities, and has invested more than P480 billion since.
The automaker has sold 14,688 units in the first quarter of this year, about 24 percent more than the units sold a year ago.
Aside from MMPC, Toyota Motor Philippines Corp. (TMPC) also received approval from the government to participate in the CARS Program with its volume model unit Vios.
3rd qualifier awaited
Meanwhile, Board of Investments (BOI), the investment promotion arm of the Department of Trade and Industry (DTI), is still awaiting a third qualifier for the last spot in the CARS program.
CARS will provide incentives for car manufacturers that will produce at least 200,000 units of one model vehicle in a span of six years.
Ceferino Rodolfo, DTI undersecretary and BOI managing head, told reporters on Friday that a lot of players had signified interest in the last slot but they did not qualify.
“There are, but they are asking for considerations. If the ambition is small, this is not for them,” Rodolfo said.
“We gave them the requirements. They looked at it and asked if this and that can be arranged, or if this and that is possible. They are asking for considerations in terms of volume and physical plant requirements,” the BOI managing head said.
“This is critical because if you invest in the program, you will do everything it takes to hit the volume production required. You will be able to come up with the 200,000 units, because how can you recover? The investment is critical because it can signal your committed volume…and this would eventually have economies of scale down the line with the local auto parts,” he added.
Rodolfo maintained that the government “would not lower” its standards and will stick to the current guidelines of Executive Order (EO) No. 182 which implements the CARS Program.
“There are some who are approaching us but their level of ambition is still low. Definitely, there is a third slot. We’re still evaluating the need to open it, and the modality of when it will open,” he said.
Under CARS, Toyota has committed to invest P3.22 billion starting this year to produce a total of 230,000 units of Vios from 2018 to 2023.
Mitsubishi is investing P4.3 billion for production and for a P2 billion stamping facility to produce an average of more than 30,000 units of Mirage per year from 2017 to 2022.