Quote:
Isuzu mulls reduction in Philippine assembly line
By: Euan Paulo C. Añonuevo, InterAksyon.com
April 11, 2013 3:49 PM
MANILA - Isuzu Philippines Corp (IPC) may reduce its vehicle manufacturing line in the country unless government provides incentives so assemblers can compete with cheap imports.
In a media briefing, outgoing IPC president Ryoji Yamazaki said local car manufacturers are weighed down by cheap imports from across Asia because of lower production costs outside.
"Ninety percent of our products are locally assembled but in order to compete with completely built-up [CBU] units from Thailand or Japan we need some fiscal and non-fiscal incentive to keep the local assembly [or] even increase the ratio or percentage of locally assembled vehicles," Yamazaki said.
Based on previous studies, the cost difference of locally-assembled vehicles and CBUs can go as high as $2,000 each or 10 percent of production cost and economies of scale, he said.
"In Thailand the production volume of pick-up trucks is more than 200,000 but here in the Philippines we are only producing 3,000 units. It's better cost-wise to import. In case we get some incentives from the government we still have hope to keep our assembly of pick-up trucks in the Philippines," Yamazaki said.
Because of the stiff competition from cheaper imports, the local car manufacturing industry's share of the domestic market has gone down from 90 percent to less than 50 percent in 10 years.
"As a result, Filipino people lose jobs," Yamazaki said, adding that IPC however has maintained the bulk of its production line.
To level the playing field between locally made cars and imports, assemblers have been pushing for the approval of a roadmap that will outline the incentives for the automotive industry, which is expected to come out by June.
IPC incoming president Nobuo Izumina said the company plans to leverage on the used truck market to increase sales.
"One thing I see in this market is there are used trucks running a lot coming from Japan. Peru a couple of years ago did the same thing -- they imported used truck from Japan [but] government decided to stop importing used trucks and changed emission level [standards]. The auto industry is [now] growing. I hope the same thing happens here," Izumina said.
IPC plans to hike production by a tenth to 13,000 units this year on account of a 10-percent projected growth in demand.
Izumina will take over the helm of IPC on May 3 from Yamazaki who has been assigned a post in the car manufacturer's headquarters in Japan.