Isuzu Philippines Corp. (IPC) is encouraging government to plan long term for the localization of motor vehicles, citing the need for incentives and parts support to encourage assembly operations.
Hajime Koso, IPC president, said the company will consider local assembly of the Traviz, a lightweight truck (category 2 for 3-tonners) for passengers and cargo, if it gets the tax breaks such as lower excise tax as well as local parts to lower the cost of producing it here.
The Indonesia-made Traviz adds to IPC’s lineup of vehicles imported completely built-up (CBU), which now account for 60 percent of the company’s total sales.
IPC is the only truck assembler in the Philippines with its line of N-Series and F-Series (Category 3 and 4). It imports big trucks from Japan; D-Max and Mu-X from Thailand and Traviz from Indonesia.
Unofficial data showed from 2017, IPC’s lineup of locally-assembled vehicles dropped to 9,349 units from 12,035 units in 2017. This will significantly drop this year with the transfer in July to Thailand of the production of the D-Max pick-up that caused the layoff of some 70 IPC employees.
A few years back, IPC also discontinued the Crosswind.
From 700 workers five years ago, the company now has 600, half of which are working in the Laguna plant.
Koso declined to comment on a petition by automotive workers to impose safeguard duties on CBUs except to say IPC and all other automotive companies will be affected.
“I would like to ask government to make sure there is a long-term strategy in terms of localization. Because in Thailand, it had big success in automotive when the Thai government decided to assemble the one-ton pickup, it gave manufacturers very big benefits … Not only Isuzu (but) most pick-up manufacturers transferred from Japan or other countries to Thailand. The pick-up manufacturing business went up and (Thailand) exported many vehicles to other countries. It was not easy, it (took a) very long time but finally it had very big success,” Koso said.
He added: “We need long-term planning to encourage automotive business not only manufacturing, but including parts suppliers.”
He said IPC has the potential to assemble Traviz though the company has not studied and computed the localization prospects.
“For this, there are no (parts) suppliers yet… If our sales go up later, and incentives are available maybe…. (we can assemble it here). (It is my) dream to assemble it (here),” Koso said.