Recently, it was written by several business reporters that Isuzu Philippines Corporation could follow Ford Group Philippines in shutting down its manufacturing facility in Biñan, Laguna, if business conditions do not improve. Isuzu contacted us and issued the following statement in hopes of quashing the rumor:
The Philippine automotive industry is facing multitudes of challenges in sustaining manufacturing, primarily with the production costs. As such, an incentive grant from the government to address the high manufacturing cost and assistance to help expand the domestic market will ease production complexities and eventually make us competitive in the ASEAN region.
Isuzu Philippines Corporation has been an advocate over the years in the promotion of domestic automotive manufacturing and jobs generation, and we intend to keep the existing manpower as much as we can. We have been resilient on the local employment issue even if our organization has encountered several impediments such as the impacts of the Japan catastrophe and the Thailand massive flooding, among others.
The cost of operating the assembly plant in the Philippines is significantly higher as compared with other ASEAN countries. IPC, with the other global automotive manufacturing companies in the country and the local parts makers, are requesting the government to extend assistance in the form of granting incentives in order for our locally assembled vehicles to be more competitive as compared with imported CBU units.
For IPC, 90 percent of the vehicles we sell (Crosswind, D-Max, N-Series light-duty trucks, and Forward medium-duty trucks) are locally assembled, and one of the backward linkages is the procurement of parts and components that are locally available, thereby contributing to the Philippine economy. We intend to continue this in our effort to help in uplifting domestic production.
There are no plans in shutting down our plant operations in Laguna. However, if current situation will persist, there is a possibility that we might scale down our assembly operations for our pickup and look for another ASEAN country where it is relatively cheaper to operate.
We believe that the government must give strong emphasis on the importance of the automotive manufacturing plants already in place so as not to give a reason for existing players to leave the country. The policies and programs should boost investors' confidence to maintain assembly firms in the country. We request for government support in providing us with incentives, fiscal and non-fiscal, on locally assembled vehicles, which will allow us to operate and sell at competitive prices. Also, incentives will allow us to retain and even grow the local assembly operations.
The support that we need from the government is very crucial for us to sustain our operations. Our parent companies will assess the viability of our business operations in the country if there will be no support for a long period of time.