PH seen to produce 1M cars a year by 2028

SANTA ROSA, Laguna-The Philippines could have an annual car production of one million units by 2027, Trade and Industry Secretary Ramon Lopez said, citing a study done by a Japanese government agency.

During the inauguration of the Mitsubishi Motors Philippines Corp. (MMPC) stamping shop in Laguna, Lopez said a study by the Japan International Cooperation Agency (Jica) suggests that such annual production would be possible nearly a decade from now.

He said the country could become a major player in the industry by building on the gains of the CARS program, which is an ongoing multibillion peso government initiative that picked two carmakers to locally produce automobiles by the hundreds of thousands.

“We are looking into a study by the Jica Team suggesting one-million units per year production target by 2027. By building on our CARS experience, this ‘Million Unit’ project can turn the Philippines into a major player in the region’s automobile industry,” he said.

Lopez told reporters at the sidelines of the inauguration that there needs to be a big demand in the local industry to encourage car manufacturers to set up shop in the Philippines.

“For that to happen, the demand in the local industry should increase so that more manufacturers would be encouraged to build here, making it also a production base,” he said in a mix of English and Filipino.

He didn’t discuss how the government would help the local industry reach that target. However, data suggests that the industry may still be far from producing that large a number of cars every year.

The Asean Automotive Federation says the Philippine automotive industry produced 141,252 units last year, which is a 20.9 percent increase from 2016.

Moreover, the CARS program may be a good example of how challenging it is to commit to a heavy volume production. Even the country’s top two selling carmakers — MMPC and Toyota Motor Philippines Corp. (TMP) — committed to locally produce at least 200,000 units each within a six-year period.

The program was previously planned to have P27 billion budget, which would be equally distributed to three carmakers. These firms are supposed to have a combined output of at least 600,000 units.

However, after some time, only MMPC and TMP were able to commit to the program’s strict requirements, leaving the government to allot the remaining P9 billion to a different manufacturing program.