Pnoy's Auto Road Map

[jpdm]

Isuzu exec says proposed local automotive roadmap 'completely wrong'




By: Likha Cuevas-Miel, InterAksyon.com
December 10, 2013 4:18 PM

MANILA - A Japanese executive of Isuzu Philippines Corp has openly criticized the Aquino administration's roadmap for the automotive industry, saying the path the government wants car makers to take is "impossible".

Takashi Tomita, Isuzu Philippines' executive vice president, told reporters on Tuesday that the proposed roadmap for the industry would not encourage growth and jobs generation--something that is sorely needed in a country that has a jobless rate of 6.5 percent as of the third quarter.

When asked if Trade Secretary Gregory L. Domingo is pushing the auto industry in the wrong direction, Tomita said: "Yes. It's completely wrong."

He said the target of making 40,000 units per model for each car manufacturer to be able to enjoy incentives from the government is "impossible" to reach given the high cost of building automobiles in the Philippines.

"It's too high. No one can follow that," the Japanese executive said.

To make matters worse, the local car market is small, relative to other countries in the region. As of October this year, Thailand has already sold 1.123 million units while the Philippines has only 148,000 units.

Toyota takes the crown for being the biggest car maker in the Philippines, churning out 15,000 units of Vios model a year. But ASEAN data show that is minuscule compared to other countries.

Tomita said even though 90 percent of the vehicles they sell in the Philippines are assembled locally, the parts are still imported from Thailand and other manufacturing hubs, adding to the cost of each unit.

The All-New Isuzu D-Max that the company introduced in the local market in September is now being manufactured here starting December 4. The first batch of the pick-up trucks sold in the country were completely built units (CBU) from abroad.

The company's trucks and its Asian utility vehicle, Crosswind, are also locally manufactured. Only the Isuzu Alterra model comes in showrooms as CBUs from Thailand, the region's car manufacturing hub.

Tomita said that despite the higher manufacturing costs--which the company absorbs for the time being--Isuzu Philippines still keeps its factories in the country because "this is the future market. At 100 million population, the potential is big."

It also pays to spread one's manufacturing hubs around the region and not put everything in one basket--a painful lesson car makers learned after the Thailand flooding in 2011.

However, Tomita said that they can only bear to continue with the localization of its car manufacturing until October 2014--with the aim of sourcing 20 to 25 percent of all Isuzu vehicle parts from the Philippines. However, without government support, Tomita could not say what would be their next step after October.

"I'd rather ask the government to protect the local assembly and supply. Otherwise, other manufacturers would be like Ford," he said.

The American car maker has closed down its only Philippine plant in Sta. Rosa, Laguna in December last year as part of the company's restructuring of regional operations, high manufacturing cost and small market.

source: Isuzu exec says proposed local automotive roadmap 'completely wrong' - InterAksyon.com

[ghosthunter]

LOL.... 40,000 cars a month from EACH car maker?

To what I remember, the total cars all the car makers sell in a year in the Philippines is roughly around 150,000.

The someone is trying to sell B.S. to the public.

We have to be honest about our local car industry. It is VERY SMALL when compared to other countries.

[K.I.L.L.]

Reality has always been the problem of our government. Our government's goals for manufacturing can be summed up in three words... Delusions Of Grandeur.

[uls]

pinost ni jpdm ito yesterday:

Philippines becoming investment magnet in ASEAN ? Jetro | Manila Bulletin | Latest Breaking News | News Philippines

Tokyo, Japan – The Philippines is outpacing Southeast Asian neighbors in attracting Japanese investments, with the usual challenges of putting up businesses a thing of the past.

While other Southeast Asian countries face a number of challenges, two main constraints in the Philippines are “difficulty in local procurement of raw materials and lack of employees,” said Isamu Wakamatsu, director of the overseas research department (Asia and Oceana) of the Japan External Trade Organization (Jetro).

Other members of the Association of Southeast Asian Nations (ASEAN) face other problems like wage issues and low quality of employees.

Jetro is a government-related organization that promotes mutual trade and investment between Japan and the rest of the world.

Wakamatsu said wage issue is the number one concern of Japanese investors planning to put up businesses in Vietnam, Thailand, Indonesia and Malaysia.

“The new trend is (that) Japanese investment is growing in the ASEAN,” Wakamatsu said.

In the past, the Philippines lagged behind ASEAN neighbors in attracting Japanese investments but recent robust economic development as well as a strong economic foundation is changing that.

Based on statistics, there will be a slowdown of Japanese investments in Thailand and Indonesia, Wakamatsu said.

As for the Philippines, the prospects “will continue in a high level,” he said.

Wakamatsu’s observation echoed a separate survey conducted last year on Japanese expatriates which rated business challenges in Asia.

In the Philippines, top two issues were mentioned: difficulty in procuring raw materials and lack of employee performance.

By comparison, the main challenges in Malaysia are wage increase, operational costs and quality of employees. In Thailand, the challenges are: wage increase, competitors’ market share are growing; lack of employee performance; difficulty in hiring executive staff and high prices.

In Indonesia, wage issues, competition, difficulty in hiring qualified staff and quality of employees are the main concerns. In Vietnam, wage increase, lack of raw materials, red tape, legal problems, tax procedures and lack of quality bug potential investments.

The survey also showed the Philippines beating China and India in all departments, with wage increase, high operational costs, and quality of employees among the many concerns.

Available data from select countries show that labor restiveness remains high but this has gone down in the Philippines.

in that article Jetro didnt mention high manufacturing cost in the Phils. and the small market

In the Philippines, top two issues were mentioned: difficulty in procuring raw materials and lack of employee performance.

but the Isuzu executive cited 2 problems with the Phils. -- high manufacturing and a small market

He said the target of making 40,000 units per model for each car manufacturer to be able to enjoy incentives from the government is "impossible" to reach given the high cost of building automobiles in the Philippines.

To make matters worse, the local car market is small, relative to other countries in the region. As of October this year, Thailand has already sold 1.123 million units while the Philippines has only 148,000 units.

Toyota takes the crown for being the biggest car maker in the Philippines, churning out 15,000 units of Vios model a year. But ASEAN data show that is minuscule compared to other countries.

[uls]

Tomita said that despite the higher manufacturing costs--which the company absorbs for the time being--Isuzu Philippines still keeps its factories in the country because "this is the future market. At 100 million population, the potential is big."

a 100 million people population doesnt guarantee a big market

China has 1.35 billion people. India has almost 1.3 billion people. the US has a liittle over 300 million people

but the US is the world's biggest consumer

how can a country of 300 million people consume more than countries with over a billion people? ACCESS TO CREDIT

how many out of the 100 million Filipinos can get a car loan?

[niky]

Let's be realistic.

Tax incentives should be there for anyone building at least 1,000 units a year.

Hell... incentives should be there for anyone building anything, even in the dozens. Setting the bar at 40k per month is like asking a local carinderia to do 500,000 a day in sales.

[uls]

Let's be realistic.

Tax incentives should be there for anyone building at least 1,000 units a year.

Hell... incentives should be there for anyone building anything, even in the dozens. Setting the bar at 40k per month is like asking a local carinderia to do 500,000 a day in sales.

yeah incentives should to be given to any who creates jobs

[falken]

Reality has always been the problem of our government. Our government's goals for manufacturing can be summed up in three words... Delusions Of Grandeur.

Our gov't comes up with their decisions by guessing. Research is not an option.

Sent from my Nexus 7 using Tapatalk 2

[Walter]

That's a big IF.

[uls]

jpdm has been posting press releases for more than 5 years