Shifting Mitsubishi to a higher gear

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Mitsubishi Motor Philippines Corporation (MMPC) president and Chief Executive Officer Yoshiaki Kato is one of the major reasons why the brand and its products are among the best in the country.

Mitsubishi Motor Philippines Corporation (MMPC) president and Chief Executive Officer Yoshiaki Kato is one of the major reasons why the brand and its products are among the best in the country.

Of the many car makers in the Philippines, Mitsubishi Motors Philippines Corporation (MMPC) was one of the very few well-positioned to cash in (literally) on the expanding domestic vehicle market during the past few years.

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Its Montero Sport has been one of the top-selling mid-sized pick-up based sport utility vehicles (SUVs) from the time it was introduced in 2008. And the Mirage, because of its predecessors sold in the 1980s and 1990s, is also a favorite in the B-Segment car class.

The presence of the Mitsubishi in the Philippines for about five decades is also a factor on why it remains to be one of the most recognizable brands in the country.

“Mitsubishi has been in this country for more than 50 years, we didn’t stop production, we didn’t stop operation. Mitsubishi brand has been strong in this country and very familiar, people feel familiar with this brand. This means we have good customer base, good dealership network. Historically we have been strong,” said MMPC president and Chief Executive Officer Yoshiaki Kato.

“The model we introduced in 2008, Montero Sport, is one of the triggers for expanding the business in this country. Montero Sport has been popular,” he added.

With the introduction of the all-new Montero Sport early this year, MMPC seems set to solidify its hold on second spot among car makers in the Philippines in terms of sales volume. And even the sudden unintended acceleration (SUA) issue seems to have failed to make a dent on the reputation of the all-new Montero, of which the top-of-the-line model has a host of features like the Forward Collision Mitigation system that is a radar-based autonomous emergency braking system. In the first stage, when there is a risk of collision, the system issues a visual and audible warning to alert the driver of a threat. The brakes are pre-filled, boosting braking pressure should the driver respond to the warning and apply the brakes. But when the driver fails to apply the brakes, the system will automatically stop the vehicle.

Seeing bigger things
While the Montero and Mirage are the new best-sellers of MMPC, Kato said the L300 van and Adventure Asian utility vehicle continue to be assembled in the Philippines by the company and both still have a stable market.

“Our market for the local [assembled]models like Adventure and L300 have been very stable. We are now selling a combined volume of 1,500 units in a month,” he added.

But Kato wants bigger things to happen at MMPC even if the company will surely get higher unit sales in the future given the current expansion of the Philippine car market.

“The market itself will expand in five years, steadily growing, and so if we keep our market share, sales volume will be much higher than the current one,” he said.

Kato added that last year’s vehicle sales reached 320,000, with some people saying it could reach 350,000 or 360,000 units.

“So if this pace continues, in 2020 the market can reach 500,000 [units]. Only if this pace continues, but I personally I think the economy of this country is very stable,” he said.

MMPC is also planning the introduction of new models to its line-up and minor changes to the current ones.

“We have several new models, new local [manufactured]Mirage, Montero Sports is still new, and there will be some minor change on current models,” Kato said.

Cars program
Kato is also optimistic about the Comprehensive Automotive Resurgence Strategy (CARS) Program with MMPC being one of the two car makers in the Philippines applying for it. The CARS Program, under Executive Order No. 182, seeks to support mass production of three qualified vehicles within a six-year timeframe. The goal is to produce no fewer than 600,000 units or 200,000 per car model. The program will provide P27 billion in incentives or P9 billion for each qualified car model.

“Actually I want to make the company stronger [in]company governance, organization. But in my first year, there were things I didn’t expect to happen [like]SUA and also the CARS Program,” Kato said.

“The announcement of the CARS Program was a bit delayed from its original schedule. So I have several things I want to do in the coming years,” he added.

In the MMPC line-up, it is the Mirage that qualifies for the CARS Program because it is a volume seller like the Toyota Vios. At present, the company’s manufacturing facility in Santa Rosa, Laguna, can accommodate increased production under the CARS Program.

“Actually, we need to invest in some new facilities, but the factory itself, we need to modify something. Basically, the factory as it is has the capacity for new models,” Kato said.

He added that the maximum capacity of the current MMPC manufacturing facility in Santa Rosa is 50,000 units a year on two work shifts. The factory currently employs about 950 and about 600 more will be needed if MMPC manufactures the Mirage under the CARS Program.

“I think it will be 1,500 [workers total]. We have to increase our production and think about two shifts, so we need to hire more people,” Kato said.

He added that participating in the CARS Program is not easy because of the targets set by it, but MMPC is willing to do its part.

“We are committed to the CARS Program but its requirement is not so easy [which is]200,000 units in six years,” Kato said.

“But we are confident [that the Philippine car]market itself will grow [and]through local production, we can reduce our manufacturing cost. It is actually a big challenge for us, but we are very happy to take this challenge,” he added.

The MMPC chief executive speaks like he has been assigned to the Philippines for several years, but he just marked his first year with the car firm in February this year.

“I came to the Philippines in the middle of February last year, and I took over my present position March or April. So I have been here for more than one year,” Kato said.

He added that based on the rules of his mother company in Japan, Mitsubishi Motor Corporation, he can be assigned to the Philippines from three to four years. But he wants to stay longer in the country to make sure things get done, especially MMPC’s planned involvement in the CARS Program. Obviously, he wants to shift MMPC to a higher gear.

“I want to stay longer because my first year passed very quickly so I haven’t done what I wanted to do,” Kato said.

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