Thursday, September 28, 2017

Mazda Moves Production of Philippine-Market CX-5 to Malaysia; Makes It Immune to Excise Tax Increase


Mazda Motor Corporation has announced that its sales and production company in Malaysia, Mazda Malaysia Sdn. Bhd., has begun producing the all-new, second-generation CX-5 for both the Malaysian domestic market and for export to several ASEAN countries including the Philippines.

With Mazda Malaysia investing some 2.3 billion yen (~ P 1.03 billion), the Mazda Kulim Plant contains technologies that put it at par with Mazda’s “parent factories” in Ujina and Hofu. The additional improvements include the partial automation of the body-welding process as well as an exclusive paint shop that does Mazda’s premium colors such as Soul Red Crystal, Machine Gray, and Snowflake White Pearl.

Currently producing the CX-5 for the Malaysian market, the Mazda Kulim plant is gearing towards export markets starting November of this year.


“We see Malaysia as an important production base in the ASEAN region and, with the aim of establishing a sturdy production system, we’ve worked closely with our business partners to develop manufacturing of Mazda cars here,” said Masatoshi Maruyama, Mazda’s Managing Executive Officer in charge of Global Production and Business Logistics. “In addition to enabling the production of cars in Soul Red Crystal and Machine Gray, colors that represent the Mazda brand, these new measures strengthen a consistent production framework based on Mazda’s manufacturing concepts and technologies. We will continue efforts to raise quality levels even higher, and I’m confident that cars manufactured here will satisfy customers in every market.”

Although the Philippines is currently importing its CX-5 from Japan, Steven Tan, the President and CEO of Bermaz Auto Philippines has confirmed that this is in the process of winding down. The exclusive distributor of Mazda vehicles and parts in the Philippines has confirmed that the already limited allocation of Made-in-Japan CX-5 units will be sold through the last quarter of 2017. Plans are currently underway to start sourcing the CX-5 in Malaysia by the first quarter of 2018.


With Mazda’s Ujina and Hofu Plants already at full capacity to serve the growing demand for compact crossover (it accounts for approximately 40 percent of Mazda’s global sales), this move to add Malaysia as an export production hub will cut customer waiting times. The CX-5 currently has a 3 to 4-month waiting list in the Philippines, something Bermaz Auto Philippines wants to shorten considerably.

While some may argue that the CX-5 will lose the prestige often associated with Made-in-Japan products (an integral part of Mazda’s communication strategy in the Philippines), the move to switch production from Japan to Malaysia has happened at a very opportune time for would-be CX-5 buyers. Aside from shorter waiting times for units, it may actually become immune to the new vehicle excise, retaining or even making it slightly cheaper than even the 2017 pricing.


Though Mr. Tan refuses to give an official figure on any price changes (he says that the excise tax issue is a very tricky matter), it’s easy to come up with an educated guess as to how the CX-5 will probably cost under the new increased excise tax, but also with reduced tariffs because of its eligibility under the ASEAN Free Trade Agreement or AFTA.

Currently, the Mazda CX-5 pricing looks like this:
  • CX-5 2.0 Pro 2WD – P 1,550,000
  • CX-5 2.5 AWD Sport – P 1,850,000
  • CX-5 2.2 AWD Sport D – P 2,200,000
With the latest version of the Tax Reform Acceleration and Inclusion or TRAIN (Senate Bill 1592) expected to be signed into law by December 2017, the Mazda CX-5 falls under the P 1.1 million to P 2.1 million category. This means, it’ll be potentially slapped with an excise tax of P 199,000 + 55 percent in excess of P 1.1 million. Assuming the source remains in Japan (20 percent tariffs), the pricing may increase to the following amounts by January 1, 2018:
  • CX-5 2.0 Pro 2WD – P 1,660,674 (+ P 110,674)
  • CX-5 2.5 AWD Sport – P 1,993,014 (+ P 143,014)
  • CX-5 2.2 AWD Sport D – P 2,380,514 (+ P 180,514)
However, by reducing the CX-5’s tariffs to zero percent thanks to AFTA, the 2018 pricing will actually come out cheaper than even the 2017 pricing assuming everything else remains constant and that Bermaz Auto Philippines passes all of its savings directly to the customers:
  • CX-5 Pro 2WD – P 1,343,967 (- P 206,033)
  • CX-5 2.5 AWD Sport – P 1,586,519 (- P 263,481)
  • CX-5 2.2 AWD Sport D – P 1,896,607 (- P 303,393)
The most likely scenario though is that Bermaz Auto Philippines will simply keep the current pricing of the CX-5 well into the implementation of the new vehicle excise tax. It will most likely gain additional features across all variants at no additional cost. Cheaper or better loaded for the same price—it’s looking to be a win-win situation for both Mazda and potential CX-5 customers as 2018 rolls in.

15 comments:

  1. Sad to say but this could've been ours if not for the wide spread red tape and high electricity cost.

    I doubt that the AWD Diesel will be priced at 1.896m even with the AFTA, maybe 1.950-2m is more realistic. Better if they bring in the FWD Diesel version, most likely it'll be priced a little lower than 1.8m with AFTA.

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    Replies
    1. I usually disagree with you, but I agree with you on this matter. Anyway, I still have 5 years to decide whether to buy a CX-5 or an MX-5 for my next car. Shelling out 0 pesos in the span of 5 years for PMS is really great. -Mazda fanboy.

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    2. Thanks for pointing out the high electricity cost which is up to 3x more expensive than our Asian neighbors. We lose out on investments and job opportunities.

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  2. Sana man lang hwag mawala ang MANUAL TRANSMISSION lalo na sa MAZDA!!!

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  3. "Exclusive paint shop that does Mazda's premium colors" you've been warned. Thou these colors are a stand out, its really next to impossible to replicate the color hue come the need for body or scratch repair.

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    Replies
    1. Actually Mazda Philippines has trained their dealers to handle the premium colors. It takes a keen eye and training, but it can be done.

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  4. Asan kaya yung si mazda fanboy na laging nagsasabi na made in japan ang mazda kaya mas maganda?

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    Replies
    1. It's not just the country of origin, its the car itself. Compare the CX5 with its rivals and it will trump them all except for the turbocharged Forester of course.

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    2. Well he's always including being made in japan in his arguments... Along with the car of the year crap.

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  5. Hi Sir Uly, if i may ask. Where did you pattern your computation, Congress or Senate version? Thanks!

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    Replies
    1. Says in the article.

      Senate Bill 1592.

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    2. Thank you Sir Uly. Hopefully it won't take effect starting January 1, 2018 as originally planned, so as to give us more time to cope up.

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  6. so if excise tax is the reason to rush buying the cx5, it's now better to wait? is crv also from japan (or malaysia/thailand)?

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    Replies
    1. CR-V is from Thailand.

      As for CX-5, that's your decision right now. Get one and you'll get it with a Made in Japan stamp or wait for 2018 and get it with a Made in Malaysia stamp. Honestly, quality should be the same more or less.

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  7. are you confident of the retained/lower pricing? im considering to wait to jump one variant up from awd gas to diesel -or- simply wait for savings (because excise tax is my only reason for buying this year).

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