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Mitsubishi builds presence in Philippines with new plant

Mitsubishi Motors has hit a new milestone in the Philippines, starting production at a plant that formerly belonged to Ford Motor.

"I am glad that we have kept on making cars here even when the market was not growing," said Osamu Masuko, chairman and chief executive officer of the Japanese automaker.

The plant near the capital Manila started operation on Thursday with a celebration attended by Philippine President Benigno Aquino. The occasion was a big deal for Mitsubishi, as the new plant lifts the carmaker's production capacity in the Southeast Asian country by 70% to 50,000 vehicles a year. This will go a long way toward helping the company reach its goal of doubling sales in the market to 100,000 vehicles a year by 2020.

Mitsubishi bought the plant from U.S. automaker Ford, which has withdrawn from the Philippines. The plant will manufacture the Mitsubishi Adventure a multi-purpose vehicle and the L300 commercial van first, with plans to make compact models later.

Long-term commitment
Mitsubishi sold a record 49,000 automobiles in the Philippines last year and secured about 20% market share. It aims to boost sales further by raising output thanks to the new plant.

Mitsubishi has stayed in the country through thick and thin, while rivals, including Nissan Motor, General Motors and Ford, have moved in and out repeatedly. The 1997 Asian currency crisis dealt a heavy blow to the Philippines' auto market, halving annual sales of 160,000 vehicles. With the government lacking clear plans to promote the auto industry, the market was unable to realize its full potential.

Mitsubishi persisted, nonetheless, guided by Masuko's vision of making Southeast Asia a core of the company's business. As a result, the Mitsubishi brand has gained wide recognition in a market that is now forecast to double in size to 400,000 vehicles a year in the near future. Mitsubishi is second only to Toyota Motor in the Philippines.

Ford's exit provided a good opportunity for Mitsubishi to boost production capacity. Many vehicles sold in the Philippines today are imported from Thailand to take advantage of a tariff-free agreement. But Mitsubishi, with its increased domestic production, is well positioned to grow if the government introduces policies to promote greener vehicles and local production.

The Philippines plays an important role along with Thailand and Indonesia in Mitsubishi's strategy to focus on Southeast Asia. The company has boosted its annual output capacity to 500,000 vehicles a year in Thailand and is now building a new plant in Indonesia. In the Philippines, the former Ford plant holds the key to Mitsubishi's success.


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