Tokyo, Japan – Japanese-led commercial vehicle manufacturer and assembler Hino Motors Philippines Corp. is looking to double the capacity of its plant in Canlubang, Laguna to cater to the growing demand for brand-new trucks and buses locally.
In an interview, Hino Motors Ltd. deputy general manager Masashi Imaoka said the company is keen on investing anew in the Philippines to expand its plant’s capacity, currently at 2,000 units per year.
“We have plans to expand so definitely we will be increasing investments in the Philippines. Investments will be for increase of our production capacity, double it by 2020. We have to prepare for the demand,” Imaoka said.
With an expanded plant, Imaoka said Hino Motors is eyeing stronger sales of about 5,000 units in the Philippines by 2020.
The company expects sales to reach 2,000 units this year from 1,250 units in 2014.
Imaoka said the firm is also planning to increase its network of dealerships across the country to more than 20 in the next two years from its current number of 15.
Hino Motor’s confidence in the Philippine commercial vehicle market stems from the company’s expectations that demand for brand new trucks and buses will eventually catch up with that of second-hand vehicles.
“Because the Philippine economy is getting better and better, when you look at commercial vehicles, price gap between brand new and second hand is getting smaller. In the Philippines, 20 to 30 percent of demand is for brand new, while 80 percent is for second hand. Since price gap is getting smaller and smaller, we are confident the brand new market will grow,” Imaoka said.
Hino Motors Philippines officials said the prices of brand new commercial vehicles are about 20 percent higher than the costs of second-hand vehicles.
They said the Philippines has a potential of becoming one of Hino Motors’ biggest markets in Southeast Asia should the trend of increasing demand for brand new commercial vehicles continue in the coming years.
Early this year, Hino Motors Philippines, formerly Pilipinas Hino Inc., saw a change in its ownership structure after Japanese firms Hino Motors and Marubeni Corp. jacked up their shareholdings to 70 and 20 percent, respectively, while local investors were diluted to 10 percent.
Hino Motors Philippines is mainly engaged in the assembly and distribution of quality Hino trucks and buses, distribution of genuine Hino spare parts, and supply of other automotive-related products.
Vicente Mills Jr., chairman of Hino Motors Philippines, earlier said the company had earmarked P80 million for capital expenditures this year, double the amount it used to spend annually with Japanese investors now at the helm.