Isuzu exec says proposed local automotive roadmap 'completely wrong'




By: Likha Cuevas-Miel, InterAksyon.com
December 10, 2013 4:18 PM



MANILA - A Japanese executive of Isuzu Philippines Corp has openly criticized the Aquino administration's roadmap for the automotive industry, saying the path the government wants car makers to take is "impossible".

Takashi Tomita, Isuzu Philippines' executive vice president, told reporters on Tuesday that the proposed roadmap for the industry would not encourage growth and jobs generation--something that is sorely needed in a country that has a jobless rate of 6.5 percent as of the third quarter.

When asked if Trade Secretary Gregory L. Domingo is pushing the auto industry in the wrong direction, Tomita said: "Yes. It's completely wrong."

He said the target of making 40,000 units per model for each car manufacturer to be able to enjoy incentives from the government is "impossible" to reach given the high cost of building automobiles in the Philippines.

"It's too high. No one can follow that," the Japanese executive said.

To make matters worse, the local car market is small, relative to other countries in the region. As of October this year, Thailand has already sold 1.123 million units while the Philippines has only 148,000 units.

Toyota takes the crown for being the biggest car maker in the Philippines, churning out 15,000 units of Vios model a year. But ASEAN data show that is minuscule compared to other countries.

Tomita said even though 90 percent of the vehicles they sell in the Philippines are assembled locally, the parts are still imported from Thailand and other manufacturing hubs, adding to the cost of each unit.

The All-New Isuzu D-Max that the company introduced in the local market in September is now being manufactured here starting December 4. The first batch of the pick-up trucks sold in the country were completely built units (CBU) from abroad.

The company's trucks and its Asian utility vehicle, Crosswind, are also locally manufactured. Only the Isuzu Alterra model comes in showrooms as CBUs from Thailand, the region's car manufacturing hub.

Tomita said that despite the higher manufacturing costs--which the company absorbs for the time being--Isuzu Philippines still keeps its factories in the country because "this is the future market. At 100 million population, the potential is big."

It also pays to spread one's manufacturing hubs around the region and not put everything in one basket--a painful lesson car makers learned after the Thailand flooding in 2011.

However, Tomita said that they can only bear to continue with the localization of its car manufacturing until October 2014--with the aim of sourcing 20 to 25 percent of all Isuzu vehicle parts from the Philippines. However, without government support, Tomita could not say what would be their next step after October.

"I'd rather ask the government to protect the local assembly and supply. Otherwise, other manufacturers would be like Ford," he said.

The American car maker has closed down its only Philippine plant in Sta. Rosa, Laguna in December last year as part of the company's restructuring of regional operations, high manufacturing cost and small market.

source: Isuzu exec says proposed local automotive roadmap 'completely wrong' - InterAksyon.com