Philippine seen as auto manufacturing hub in region within 10 years

MANILA, Philippines — The Japan International Cooperation Agency (JICA) sees the Philippines emerging as a regional automotive manufacturing hub capable of exporting vehicles in less than a decade as local production is expected to rise to one million units annually.

Trade Secretary Ramon Lopez said a new study by JICA suggests that Philippine vehicle production would hit one million units per year by 2027.

“This one million-unit project can turn the Philippines into a major player in the region’s auto industry,” Lopez said.

To attain this volume, Lopez said local industry demand would have to expand continuously to encourage more manufacturers to put up factories and make it as their production base.

“As the car companies continue to invest here, our local capacity gets stronger. So hopefully we reach that one million capacity in the future,” he said.

Lopez said the government’s Comprehensive Automotive Resurgence Strategy (CARS) is one of many efforts to revitalize the Philippine automotive industry and develop the country as a regional automotive manufacturing hub.

“The CARS program will help us attract new investments, stimulate demand and effectively implement industry regulations in the country,” he said.

Lopez said Mitsubishi Philippines’ newly inaugurated stamping plant in Laguna, the largest in the country, also leads the Philippines closer to “generating capacities that will prepare us for the future plans to make Philippines the hub of car manufacturing of one million a year by 2027 for local and export demand.”

“By signaling our commitment to this (one-million unit) project, we expect that Japan and other global auto players will have more reasons to invest with us,” he said.

Vehicle production in the country continues to expand annually, even outgrowing most markets in the region last year, but remained lagging behind its peers in terms of volume.

Data from the ASEAN Automotive Federation showed motor vehicle production in the Philippines accelerated 21 percent in 2017 to 116,868 units from 141,252 units in the previous year.

The 21 percent growth was second fastest behind Myanmar’s triple-digit expansion, but production in both countries finished at the bottom of the region volume-wise.

Thailand remained the region’s top production hub in 2017 with 1.99 million units, up two percent from 2016’s 1.94 million units.

This was followed by Indonesia which saw production rising three percent year-on-year to 1.22 million units in 2017.

Despite seeing a year-on-year decline, production in Malaysia and Vietnam remained larger than that of the Philippines at 499,639 units and 195,937 units, respectively.