DTI revives talks with vehicle makers

The Department of Trade and Industry has revived talks with local auto manufacturers to find a way to expand the local industry and to make the environment conducive enough for players to enter the overseas market.

“We’re trying to see what we can do so we can expand, including the export aspect,” Trade Secretary Gregory Domingo told reporters on the sidelines of the Philippines-Vietnam Business Forum Thursday.

In an earlier interview, he said the country should find its niche in the auto industry, similar to what Thailand had done, instead of competing head-on with countries that had already identified the vehicle type on which they would focus.

Domingo said the ultimate plan was to become a big manufacturing base for exports of completely built-up units. This could only be done if the country would settle on a particular niche.

“But we don’t have the knowledge (within the government) to decide which segment of the sector we should focus on, so we need the industry’s help to craft that strategy,” he explained.

The Board of Investments (BoI) has yet to come out with the guidelines for Executive Order 877-A, or the Comprehensive Motor Vehicle Development Plan, because it still needs the industry’s input on where exactly to go.

A group of auto assemblers teamed up last year and commissioned the University of Asia and the Pacific to assess the current auto industry landscape and come up with recommendations on how auto assembly and exports could thrive in the country.

They asked for two months to complete the study, starting on Dec. 15, 2010. When the end-February deadline was reached, another extension was sought. Up to now, however, the results of the study have yet to be submitted to the BoI.

In a related development, Domingo said the DTI had signed a draft executive order that would allow auto assemblers to import capital equipment duty-free.

An initial version of the draft EO was revised and resubmitted to the National Economic Development Authority, he related, as it was deemed too lax.

Domingo said the earlier version of the EO allowed the duty-free importation of too many products covered by major tariff lines. Products that were not considered capital equipment, even if they fell under tariff lines covered by the duty-free importation privilege, were struck from the list.

“We wanted to make sure that those [products] that would qualify for duty-free importation were purely capital equipment. We thought the first list had [too many inclusions],” Domingo said.