Isuzu may scale down Phl operations

MANILA, Philippines - Isuzu Philippines Corp. (IPC) may scale down its assembly operations next year if incentives are given to local car manufacturers by the government, officials said yesterday.

“If we don’t get incentives next year, we might consider scaling down our assembly of CKDs (completely knocked down) here,” Arthur Balmadrid, senior vice president for corporate business division of IPC told reporters.

He said producing cars in the Philippines has become more expensive compared to bringing in completely built units (CBUs) made in other countries.

In other countries such as Thailand, car manufacturers are given incentives in the form of reduced taxes imposed on locally-assembled vehicles which allow them to sell at lower prices.

Incentives, Balmadrid said, would allow local car manufacturers to be competitive.

Joseph Bautista, IPC assistant division head for sales, agrees that the government could provide fiscal incentives such as lower excise taxes for cars with greater local content.

He said government could also give non-fiscal incentives in the form of agencies purchasing locally-assembled cars instead of CBUs or second-hand vehicles.

“If we will be given incentives, we can retain local assembly operations and even grow,” he said.

The bulk or 90 percent of IPC’s products are assembled in the Philippines except for the Alterra sports utility vehicle.

Balmadrid said IPC is planning to launch the new D-Max pick up in the first quarter of next year.

Without incentives though, IPC may not be able to assemble the new D-Max model.

“If we will not be price competitive, we will just import the vehicles,” Balmadrid said.

He said IPC would want to manufacture vehicles for export as well but noted that it would be difficult at the moment without incentives.

IPC currently produces 10,000 to 12,000 units of vehicles per year, but its plant in Laguna has an annual capacity of 15,000 units.

IPC is aiming to sell 13,000 vehicles this year, 20 percent higher than a year ago.

As of end-August, IPC’s sales reached 7,579 units, up 21 percent from the 6,259 units sold in the comparable period a year ago.