Japanese automaker Mitsubishi Motors is exploring the prospect of establishing a new vehicle model assembly line in the Philippines according to a trade official, banking on the extension of a government program which gives incentives to local car assemblers.
“They want to get into, probably, a new model assembly that they have not disclosed yet. So, that’s really contingent on our CARS program,” Senior Trade Representative Dita Angara-Mathay told reporters recently.
CARS stands for the Comprehensive Automotive Resurgence Strategy, an industry development program under the Department of Trade and Industry signed in 2015.
Under the program, two slots were allotted to eligible vehicle manufacturers to avail of tax perks for hitting a specific production volume in a given time.
The carmakers which qualified under the CARS program were Mitsubishi Motors Philippines Corp. (MMPC) and Toyota Motor Philippines Corp. (TMPC), the local units of the Japanese car brands.
They are expected to locally produce 200,000 units of the Toyota Vios and the Mitsubishi Mirage models in a period of six years.
The two started production in 2018, with both automotive firms sourcing 42 percent of the car components and parts locally.
As of December 2022, TMPC has already produced 134,242 Vios units while MMPC has manufactured 72,923 Mirage to date according to the trade official.
The Philippine government allotted P27 billion for the fiscal incentives under the program.
Based on a six-year life of CARS program, the government is expected to have an estimated net revenue of P18.77 billion coming from income tax, value-added taxes, and withholding tax payments.