Report: Pandemic puts pressure on Toyota and Mitsubishi’s CARS program

The two carmakers now have a tighter schedule after months of zero production
by Leandre Grecia | Jul 10, 2020
PHOTO: Mitsubishi, Toyota
CAR BRANDS IN THIS ARTICLE

We all know that the automotive industry took a huge hit from this COVID-19 pandemic. It appears, however, that certain carmakers are feeling the effects more than others.

These car brands are Toyota Motor Philippines (TMP) and Mitsubishi Motors Philippines (MMPC), the country’s top two automotive manufacturers. Why would the top-selling brands have more trouble bouncing back than the others who were already struggling even before the crisis began?

Well, that’s because in terms of manufacturing, TMP and MMPC have strict deadlines to meet regarding the government’s Comprehensive Automotive Resurgence Strategy (CARS) program. In a nutshell, the CARS program requires companies to produce 200,000 of its participating vehicles—specifically the Toyota Vios and the Mitsubishi Mirage—within six years. As it stands, the government has yet to revise the program’s guidelines or move the deadline even after production was suspended for several months due to the coronavirus outbreak. This is where TMP and MMPC’s problems lie.

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Nikkei Asian Review reports that MMPC’s deadline is on February 2023, and as of this writing, it has only produced 50,000 Mirages so far. TMP, on the other hand, has more leeway with its 2024 deadline.

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We don’t have the exact figures on the carmakers’ backlogs, but knowing that their plants completely shut down for several months is enough to get an idea of just how big those backlogs are. If TMP and MMPC fail to meet the 200,000-vehicle target, they risk forfeiting the tax incentives of up to P9 billion.

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Department of Trade and Industry undersecretary Ceferino Rodolfo said in a recent statement that there have been no discussions yet on the revisions of the CARS program. However, Rodolfo mentioned that the carmakers “might be given a longer time to comply with the volume target” with said volume targets seeing no adjustments.

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PHOTO: Mitsubishi, Toyota
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