Isuzu Philippines Corp. said it added a transmission assembly line to its factory in Biñan, Laguna to complement the assembly efforts and increase the company’s local parts utilization under the Public Utility Vehicle Modernization Program.
IPC manager for sales and marketing Joseph Bautista said Isuzu became the first automotive company to create an assembly line dedicated for the transmission component for PUVs.
“The prospect of the volume looks promising. Because of the program, the potential here in the Philippines is huge. With as many as 200,000 jeepneys that the government aims to be replaced by modern PUVs, we see the urgent need to have a transmission line here,” he said.
Isuzu Auto Parts Manufacturing, a sister company of IPC in the Philippines, is responsible for putting together the transmission line. Isuzu used to import the transmission gear from Japan.
Adding the transmission and the body, the local content of Isuzu PUVs have reached 60 percent, one of the conditions a PUV program participant should be able to satisfy.
The localized transmission segment will qualify for the fixed investment support, which is 50 percent of the total incentives a PUV participant gets to benefit from the incentives program.
Production incentive requires participating companies to fill in a certain volume for a given period in time. Current discussions call for at least 5,000 units sold every six months.
This means that the production incentive, which is the other half of total incentives, will be released every six months once the company hits the required volume.
“This is very performance-based and more time-bound compared to the CARS [Comprehensive Automotive Resurgence Strategy] program for sedans. We noticed that the government is really serious about getting modern PUVs on board. That’s why we also need to step up,” Bautista said.
The Isuzu plant in Biñan has a rated capacity to produce 16,000 units annually.
As the company shifted to bringing in completely knocked-down units for the D-MAX model, the plant is underutilized, but IPC hopes to go full-blast once the PUV Modernization program takes off by 2020.
The company revealed during the launch of the newest D-MAX variant on Aug. 29 that all of its D-MAX models would be imported from Thailand.
“Our production level cannot reach economies of scale unlike Thailand that rolls off 300,000 to 400,000 units a year. Bringing in CBU is easier than continuing with our CDK assembly. The lead time to produce a unit is definitely longer,” Bautista said.
“Introduced in 2003, the Isuzu D-MAX pick-up has sold more than 46,000 units so far and continues to be one of the country’s most popular pick-up models for its durability, fuel efficiency and overall value for money. The new Isuzu D-MAX LS-A joins the ranks of premium pick-ups with its stylish yet functional design and competitive pricing without compromising the D-MAX’s core value of being ‘tough enough for anything’,” said IPC president Isuzu president Hajime Koso.