Marcos 'very positive' on extending CARS Program, Xpander local production up in the air -- Mitsubishi Motors president

The Philippine government is receptive to extending a program that provides billions of pesos in incentives to carmakers that produce vehicles locally.

Mitsubishi Motors Corporation president and CEO Takao Kato said he met President Ferdinand Marcos Jr. recently and discussed extending the Comprehensive Automotive Resurgence Strategy (CARS) Program.

“I think that the President is very positive,” he told reporters at the sidelines of Mitsubishi Motors Philippines Corporation’s (MMPC) 60th-anniversary celebration at its Santa Rosa, Laguna plant. 

“He fully agreed with my opinion, and he agreed that, during the pandemic, economic activity almost stopped,” Kato added.

The head of the Japanese automotive giant also said Mitsubishi is requesting an extension of around three to five years.

Xpander eyed for local production

Kato also confirmed that the popular Mitsubishi Xpander multi-purpose vehicle is one of the models being considered for Philippine production.

“I have not decided yet, but not only Xpander,” he said. “Now we have a lot of plans to introduce new models. And definitely, some of those new models will come to this MMPC manufacturing plant.”

Kato said he would announce his final decision “in a couple of months.”

The Xpander and its Xpander Cross sibling are among the best-selling seven-seater MPVs in the Philippines, with MMPC selling 16,309 units of both models in 2022. 

It is currently imported as a completely built unit from Mitsubishi’s Indonesian plant.

Unmet targets

The CARS Program was created in 2015 under Executive Order 182 of former President Benigno Aquino III.

It aims to revitalize the local car industry by providing ₱9 billion in government subsidies to each qualified manufacturer over six years. Each carmaker must produce at least 200,000 units each in that period, with most parts also produced locally, all for domestic sale.

MMPC, the country’s second-largest local car manufacturer in sales, builds the Mirage hatchback and Mirage G4 sedan under the scheme at its Santa Rosa plant.

Toyota Motor Philippines is also part of the program with the popular Toyota Vios subcompact sedan.

However, carmakers are pushing to extend the program in light of production delays caused by the COVID-19 pandemic in 2020 and reduced demand for cars because of higher excise taxes under the government’s tax-reform law.

Senior Trade Representative Dita Angara-Mathay said as of December 2022, Toyota has only produced 134,242 Vios units, while Mitsubishi has built 72,923 Mirage units.

Should the government continue its program to promote domestic car production?

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