The absence of clear guidelines for Executive Order 877-A, or the Comprehensive Motor Vehicle Development Plan, will stunt the growth of the local auto industry and discourage players from expanding their operations here, according to the top executive of Toyota Motor Philippines Corp.
TMPC president Michinobu Sugata said the government should lay down a clear roadmap for the auto industry if it wanted the sector to survive for the long term.
“It affects our planning for the next 10 years. We’re expecting measures to come up so we can have a clear development picture. Without the MVDP, we won’t grow as much in the next five to 10 years. We can survive for the short term, but not for the long term,” Sugata told reporters Wednesday.
Sugata said that if the government really wanted the local vehicle industry to succeed, it should focus on beefing up the auto parts sector.
Right now, Sugata said the country had the capability to produce many different kinds of auto parts and components. However, the current production base was still very small compared with Thailand and Indonesia, due mainly to a lack of incentives to encourage new players to come in and existing players to expand.
The proper incentive structure should be put in place, he said, to jack up the competitiveness of local auto parts and components regionally and globally.
Exports of auto components and parts currently account for 95 percent of total auto industry exports, as only Ford Group Philippines is shipping out completely built-up units.
Sugata said TMP, through affiliate Toyota Auto Parts Inc., was inclined to further expand its production, given the right incentive structure.
“Parts manufacturing is very important. When you look at exports, don’t just look at CBUs,” he said.
The Toyota Group last year shipped $860 million in parts and components—equivalent to 86,000 CBUs in terms of value.