Great times ahead for Mitsubishi PH

These are great times, indeed, for Mitsubishi to be in the Philippines.

First off, by January next year, Mitsubishi Motors Philippines Inc. (MMPI) will be rolling out the Mirage G4 sedan from its Sta. Rosa plant in Laguna as part of its commitment under the Philippine government-initiated Comprehensive Automotive Resurgence Strategy (CARS) program. MMPI is the local affiliate of the global Mitsubishi Motors Corporation based in Japan.

Four months later, in May, MMPC has slated delivery of the Mirage hatchback, still from its Sta. Rosa plant, to its dealers nationwide. The Mirage variants are expected to boost its plant capacity, which already presently produces the multi-purpose vehicle Adventure and L-300 vans.

By January 2018, MMPC will inaugurate the country’s first stamping plant, a P2-billion investment by Mitsubishi toward improving the Sta. Rosa facilities that it had acquired from Ford Philippines in 2015.

This will enable MMPC to mass produce big metal body parts of automobiles such as the top, side and underchassis panels, and plastic parts such as bumpers, consoles and dashboards.

This will also bring the local content of the Mirage G4 sedan and the Mirage hatchback to more than 50 percent, and will encourage more Philippine parts manufacturers and suppliers to produce and invest in the downstream automotive sector.

‘Second establishment’

All these developments are parts of what Mitsubishi Motor Corporation (MMC) chairman, president and CEO Osamu Masuko calls as a stage of “second establishment,” a revitalization move that had started with its decision to bring its current production of 50,000 units to 100,000 sometime in the near future.

So far, including its commitment to the CARS program, MMPC will be spending P4.3 billion. More investments are in the pipeline, adds Masuko, as it plans to further expand the capabilities of the Sta. Rosa facility.

“We would like to contribute to the development of the automotive industry in the Philippines through the promotion of local production, expansion of local parts procurement, and promotion of employment,” Masuko said.

With the rollout of the Mirage G4 next year, the manpower count at the Sta. Rosa would be increased to 1,400 from 1,000. And with the start of operations of the stamping plant, the manpower complement would rise to 1,500.

As one of the two local automotive companies participating in the CARS program, MMPC has been bullish about its prospects in the Philippines where it currently accounts for one out of every six cars on the road, and maintains a strong position as the second largest automotive company in the Philippines next only to market leader Toyota.

Compared with other countries in the Asean region, Masuko says that the Philippine market holds a strong potential for growth. With over 100 million Filipinos, the car population is lower than what its counterparts in the region has.

Dampened prospects

This bullishness is somehow dampened by recent uncertainties, particularly of the government’s latest pronouncements about introducing additional excise taxes on most vehicles sold in the Philippines—whether imported, fully assembled, or manufactured at a local facility.

The proposed added tax of between 20 percent to 60 percent is seen to affect the selling price of vehicles in the Philippines currently carrying a price tag of P600,000 or higher.

Mitsubishi and Toyota, being CARS program participants, are committed to produce 200,000 and 230,000 units, respectively, of their approved vehicles over a six-year period, and the proposed taxes are seen to dampen demand even if just for the first couple of years.

The Philippine automotive industry is currently preparing its position with regards the proposed taxes, but MMPC president Yoshiaki Kato said that the government should look into higher revenues from increased sales, including exports, rather than from hiked taxes.

Sedan shift

For MMPC, betting on the Mirage as a way to building a bigger market base in the Philippines is as safe as it can get. Kato sees a demand spurt among younger Filipinos in the coming years for sedans like the Mirage G4 that are affordably priced and fuel frugal.

The G4 has been gaining a fair share of followers in the Asean, which is validated by growing exports from Thailand where MMC has a big production plant. It’s easy to maneuver within the city, and perfect for crawling the packed streets.

The Mirage G4 has a 1.2-liter three-cylinder engine, that works hard to produce 78 horsepower through a five-speed manual or an optional CVT automatic.

During the MMC-sponsored tour for Filipino members of the media to its Okazaki plant in Japan, the G4 was put through an actual crash test to demonstrate its safety features.

Ramming a brick wall at 56 kph, the G4 let loose its airbags to safely protect both front seat passengers. According to the MMC safety experts, an average of two vehicles a day are tested at its facility, thus accounting to the high ratings the G4 has received from government testing agencies.

The safety airbags are standard for the G4, and if the Philippine version will be similar to what was unveiled in Toronto earlier this year, it should also have Apple CarPlay and Android Auto compatibility on a touchscreen display, which would most likely appeal to the the potential market for this subcompact car.