SMEs urged to tie up with auto parts suppliers

LOCAL enterprises are urged to partner with parts suppliers and their principals so they can effectively penetrate and be part of the lucrative global value chains (GVCs) of the automotive companies, the Motor Vehicle Parts Manufacturers Association of the Philippines (MVPMAP) said last week.

“There are such partnerships but usually, these Japanese car makers would partner with their Japanese suppliers. What we’re saying is that small and medium sized enterprises should have joint venture agreements with the Japanese suppliers,” said MVPMAP president Ferdinand Raquelsantos.

“This partnership can help local SMEs to level up and be suppliers to the GVCs. If an SME doesn’t have a backing, it will be very hard for them to get into the global value chain,” he stressed.

Raquelsantos pointed out that increased support from the assemblers or car manufacturers and the government would also be highly critical in pushing SMEs to be part of these supply chains.

Vicente T. Mills Jr., president of the Philippine Automotive Federation, pointed out that it would be critical as well for the SMEs to be serious in going to the brand principals to make an offer on what they could supply, and in upgrading their respective capacities.

At the same time, the Philippine government must do its part to help encourage production and convince auto makers to either put up or expand their facilities in the country, as this will, in turn, help fuel the businesses of local auto parts makers and suppliers.

The recently concluded 22nd Automotive Dialogue saw member economies of the Apec committing to pursue initiatives and measures that are all aimed at easing the entry of SMEs into these GVCs.

One of these was the Global Value Chain (GVC)-SME for the Automotive Sector (GSAS) Project proposed by the Philippines and Malaysia. The GSAS Project seeks to illustrate GVC mapping in the region; promote best practices in GVC integration; and identify nontariff barriers to trade and investment. It will facilitate SMEs to develop practical solutions to address these economic barriers.

Apec is also putting together a roadmap that will not only promote the massive use of electric vehicles, but also help level the playing field for the small and medium sized enterprises seeking to be part of this industry’s global supply chain.

To formulate this roadmap, Apec economies will have to answer a 10-point template survey pertaining to the technical and regulatory systems for electric vehicles in their respective countries. Also proposed is the creation of an EV Interoperability and Research Center, which will help align the charging, infrastructure and communications systems for electric vehicles in all Apec economies. Amy R. Remo