Japan’s Hino Motors Ltd. said it plans to double production capacity at its truck assembly plant in Canlubang, Laguna, Philippines, to 4,000 units.

“The Philippine economy is getting better and better for commercial vehicles and the difference in the price between a brand new and second hand [vehicle] is getting smaller,” said Masashi Imaoka, Hino Motors’ deputy general manager for Asia and Oceania.

“The price gap is small and so we are confident that the brand new market [for trucks and buses] is getting bigger,” Imaoka said. The price gap between new and used trucks is reportedly around 20%. Demand for trucks has been growing by 20 to 30% per year, he said.

According to Imaoka, Hino is also planning to launch new models as it introduces Euro-4 compliant vehicles, in compliance with the Philippines’ Euro-4 fuel and emission standards.

“In Vietnam, Hino is already selling 5,000 units but the difference is the used car market. The Philippines still imports used cars but if the government is able to restrict this, we have more potential to grow,” said Atsushi Suzuki, general manager for the automotive department of Japanese trading house Marubeni Corp.

Sales of trucks and buses in the Philippines are projected to grow to as much as 5,000 starting 2020, Imaoka said.

“When we compare the market size of Vietnam and the Philippines, and if they will have the same conditions [in terms of used trucks and buses], the Philippine market is bigger,”  Suzuki said. He said Hino is already selling 5,000 units in Vietnam, but the Philippines still imports used vehicles, thus new truck sales in the Philippines is lower than Vietnam’s.

Hino is also trying to reestablish the business in the Philippines, particularly in terms of quality control standards, to be at par with Hino’s global standards.