DTI prods Mitsubishi to assemble 'Xpander' here
The Department of Trade and Industry (DTI) is courting Mitsubishi Motors Corp. (MPC) to assemble the next generation Xpander, a compact sports utility vehicle, to fulfill its commitment under the Comprehensive Automotive Resurgence Strategy (CARS).
DTI Special Trade Representative to Japan Dita Angara-Mathay revealed during a debriefing on the recent official visit of President Ferdinand R. Marcos Jr. to Japan that the car manufacturing giant has requested for a change in its enrolled CARS models Mirage and G4.
The company has not yet disclosed what model they may bring into the country, but Angara-Mathay said “We’re hoping they will be making the next generation Xpander here.” The popular Xpander is being assembled in Indonesia.
Its current model Mirage, a small sedan, did not fare well in the local market partly because of the rise in fuel prices.
But to be able to assemble the new model, MPC has also requested for two to three-year extension of the 6-year CARS program as the company had difficulty producing during the almost three years of COVID restrictions.
Participants to the tax incentive-driven CARS program are required to produce 200,000 units each of their enrolled model over a six-year period but they were also caught up by the pandemic.
The Board of Investments (BOI), which administers the program, has expressed willingness to extend the CARS program.
The local Mitsubishi Motors Philippines Corp. invested P4.2 billion and started production of Mirage and G4 models in Feb. 2017. Latest figure released by the BOI last year showed the company was able to produce 72,932 units only of Mirage.
Aside from the tax incentives on investments on parts localization, participants also get incentives based on the number of units produced.
In addition, the domestic motor vehicle industry has developed new capabilities in, among others, big volume parts like body shell in large plastics, which are key contributors to the high import logistics cost in a completely knocked down manufacturing operation.
For the six-year CARS program, the BOI has estimated net government revenues of P18.77 billion from income taxes, VAT, duties, and withholding tax payments.