JAPAN’s Mitsubishi Motors does not see the zero tariff concessions given by the Philippines to the United States having immediate impact on its local operations.
“(Mitsubishi) vehicles with more than 3 liters (in engine size) are not so many. The other brands, yes. But the 3-liter vehicle is a very big vehicle. I’m not sure if it’s suitable for the Philippine market,” Takao Kato, president and CEO of Mitsubishi Motors, said on the sidelines of the launch Mitsubishi Motor Finance Philippines in Makati City on Friday, August 1.
Kato was referring to big-sized engine American vehicles produced in the US that would come in at zero tariff to the Philippines and would compete with Japan-made vehicles of the same engine size.
Mitsubishi Motors also welcomed the planned Revitalizing Automotive Industry for Competitiveness Enhancement (RACE) Program of the Board of Investments.
But Kato said the company has yet to decide whether or not to join the RACE nor the model it would enter in the program
“We would like to study,” Kato said. RACE program grants incentives to locally-produced vehicles through fiscal and non-fiscal support.
Mitsubishi Motors Philippines Corp. (MMPC) President and Chief Executive Officer Ritsu Imaeda agrees with Kato’s observation on the tariffs, saying it is too early to make an assessment.
“Just as an overall observation, I think it’s not going to impact in the short term. But still, we are trying to investigate or present this, how it could impact the market itself,” Imaeda said.
He added that US vehicle imports are limited at the moment.
“For instance, for the US brands, the most famous is Ford. Their cars are basically coming from Thailand,” Imaeda said.
Vehicles imported from Asean already enjoy zero tariff. “Will there be any benefit for them?,” he added.
“The other thing that we could think about is, for instance, is importation of Japanese products to the Philippines. Maybe it might be possible (for Japanese brands) to import the cars from the US production … But I think that will take time because of the regulations and so on, they’re not prepared to produce those Philippine-marketed products over there (the US). This is what we see at this moment,” Imaeda added. Under the Japan-Philippines economic partnership agreement, vehicles with engine size of above 3 liters imported from Japan enter the Philippine duty-free. Those with engine size of 3 liters and below are slapped 20 percent duties.
