PH automotive sector lags behind Asean

The Philippine automotive sector continued to trudge behind its neighbors in the Asean in terms of vehicle sales and production despite posting a robust year-on-year growth domestically.

Documents from the Asean Automotive Federation showed that the Philippines ranked fourth as it sold only 116,613 motor vehicles in the first eight months of the year. This volume paled in comparison with Thailand’s 939,342 units from January to August 2013.

Indonesia posted the second-highest motor vehicle sales at 792,358 units, followed by Malaysia, at 433,023 units. Vietnam, Singapore and Brunei sold 60,538 units, 22,178 units and 12,649 units, respectively, during the same period.

For motorcycles and scooters, the highest sales were seen in Indonesia at 5.14 million units from January to August, followed by Thailand, with sales reaching 1.44 million, and the Philippines at 478,858 units.

In terms of motor vehicle production, the Philippines lagged at the bottom compared to four other countries with a production of 50,223 units as of end-August this year.

Data from the Asean federation further showed that Thailand remained at the top with a production of 1.74 million motor vehicles from January to August, followed by Indonesia, which produced 770,367 units. Malaysia’s motor vehicle production reached 385,851 units while Vietnam produced a total of 55,883 units during the same period.

The local automotive sector, however, is anticipating improvements in these figures once the Philippine government issues the much-awaited roadmap for the industry.

The roadmap is expected to contain policy directions meant to make the local sector more competitive in preparation for the Asean Economic Community (AEC) and the so-called “third wave of high motorization in the Asean region” by 2015.

Trade and Industry Secretary Gregory L. Domingo earlier said that incentives would be granted to local automotive firms that could produce at least 40,000 units a year for each model they sell.

What was proposed, he said, was a “performance-based incentive” mechanism wherein no other perks would be given at the onset and only those companies that commit to and comply with the required minimum volume would enjoy the incentives. Since the required volumes will be high, local automotive firms will be compelled to export a portion of their production.

The AEC is defined as having a single market and distribution base, a highly competitive economic region with equitable economic development and a region fully integrated into the global economy.