Toyota will spend PHP3.22bn pesos (US$70m) on its Philippines division to increase local production and qualify for a new tax incentive, according to a government statement cited by the Reuters news agency. Meanwhile, Mitsubishi has received the government green light for its plans for the country.

The Board of Investments said Toyota would build 230,000 Vios subcompact sedans during a $600m six-year incentive programme called Comprehensive Automotive Resurgence Strategy (CARS) the government introduced last year to boost automotive output and raise regional competitiveness, according to the report.

Rommel Gutierrez, first vice-president for government affairs at Toyota Motor Philippines, confirmed to Reuters the automaker planned to invest but declined to elaborate.

The Toyota spending would follow that of Mitsubishi Motors which in February said it would expand local assembly in the country by starting production of the Mirage and Mirage G4 (Attrage in some markets) from the beginning of 2017 at Mitsubishi Motors Philippines Corporation's Santa Rosa plant. Operations began there in January 2015 after MMC bought the factory from Ford. The automaker last December said it would boost 2016 output by 17% to meet expected extra demand prompted by local elections last May. The plant move in 2015 reduced the year's output 15% to about 15,000 but this year's forecast production is 17,500.

As well as adding the two new models, MMC plans an initial spend at MMPC of over PHP4.3bn (JPY10.4bn) which includes a new stamping plant. Spending and employment will rise in line with production capacity expansion – initial target is 50,000 units. 

Reuters said Toyota Motor Philippines, a joint venture with local conglomerate GT Capital Holdings, already builds Vios and Innova at a factory south of Manila. The automaker is the Philippines' biggest by sales.

On Thursday (16 June), MMC said in a statement Mitsubishi Motors Philippines Corporation (MMPC) had received government approval to take part in the CARS programme and would proceed with its local manufacturing plans.
 
Yoshiaki Kato, president and CEO of MMPC, said: "This signifies MMPC's more than half a century commitment to developing the automotive manufacturing industry in the Philippines. Under the CARS programme our projected production volume is 200,000 units within a period of six years. In order to meet this target volume, MMPC plans to increase its plant's capacity by adding another work shift. Along with this, more jobs are likely to be generated nationwide."
 
MMC said automotive industry associations and economists predict total industry sales will reach the 500,000 units mark by 2020.

According to Reuters, The Board of Investments also said it expects vehicle parts makers working with Toyota and Mitsubishi to generate more than $388m in fresh investment due to the government's CARS programme.