Mitsubishi, SBC launch auto finance venture
Mitsubishi Motors Corp. (MMC) and Security Bank Corp. (SBC) on Friday launched Mitsubishi Motors Finance Philippines Inc., a joint venture that top executives say may help the companies cushion the impact of US tariffs under President Donald Trump and defend their market share.
Takao Kato, president and CEO of MMC, said the tie-up should help the Top 2 carmaker in the Philippines increase its market share from 19 percent to “more than 20 percent” during the early years of Mitsubishi Motors Finance.
“But of course, for example, in five years, I would like them to target 25 percent or more,” Kato told a press conference.
The formation of the joint venture comes amid fresh tariff developments that may shake the Philippines’ auto industry, where Japanese carmakers dominate with a combined market share exceeding 86 percent, according to the latest industry data.
President Ferdinand Marcos announced that the United States will slightly reduce tariffs on Philippine exports to 19 percent from 20 percent, following a bilateral meeting with Donald Trump in Washington last month.
In exchange, the Philippines will scrap tariffs on US made vehicles and offer other trade concessions. Whether the preferential treatment will lift American auto sales remains uncertain.
US automakers currently hold just a 4.7 percent share of the local market—entirely attributable to Ford.
Security Bank President and CEO Sanjiv Vohra said at the same news conference that the partnership with MMC will support the lender’s auto loan growth, which surged 52 percent year-on-year in the first quarter. The broader banking sector is increasingly leaning on retail lending to cushion the impact of US tariffs on corporate loans, as business sentiment remains subdued.
Vohra added that the new auto financing company is expected to help MMC defend—and potentially grow—its market share by offering tailored financing solutions to consumers.
“It (joint venture) will allow both the partners to be able to counter the impacts of tariffs, if any, through the financing options,” Vohra said.
“So, I think it gives us an opportunity, or at least gives the two partners an opportunity to provide the right financing mix if we need to counter some impact of the tariffs. So, I think the joint venture will assist manufacturers like Mitsubishi Motors in their attempt to counter the tariffs in the market,” he added.
