Approval of automotive sector dev’t program cheered

The country’s largest group of automotive firms and an association of local auto parts makers hailed the approval of the Comprehensive Automotive Resources Strategy (CARS) Program, which is expected to sustain the growth of the Philippine manufacturing sector.

Rommel Gutierrez, president of the Chamber of Automotive Manufacturers of the Philippines Inc. (Campi), said the issuance of Executive Order 182, which provides for the implementation of the CARS program, was “timely in view of the need of the Philippine motor vehicle industry to achieve competitiveness in the region.”

“Campi acknowledges the efforts of the government in ensuring a resurgent automotive industry that will boost vehicle and parts manufacturing capability in the country,” he said in a text message Tuesday.

This program, which will offer as much as P27 billion worth of time-bound and performance-based fiscal incentives to support three models, will also give the country’s automotive industry an opportunity to take part in the regional supply chain, Gutierrez added.

In a separate statement issued late Tuesday, Motor Vehicle Parts Manufacturers Association of the Philippines (MVPMAP) president Ferdinand Raquelsantos said the incentives to be provided under the CARS program would help bring down the cost of production of auto parts, enabling local producers to be more competitive against their counterparts in the region.

“The issuance of the CARS Program solidifies the belief that manufacturing is the key to economic growth and sustainability. Parts makers can also expect new product parts developments for whatever new models that will be locally assembled by car manufacturers,” Raquelsantos said.

“Considering that at the moment, more than 60 percent of our country’s auto sales are from completely built up (CBU imported vehicles, it will mean an increase in local assembly from completely knocked down (CKD) kits. This will mean local value added benefits in terms of labor, materials and auto parts,” he added.

Under the new CARS program, the government will offer incentives that will support new investments in fixed capital expenditures in new parts making capability and encourage large scale production in vehicle assembly.

This package is expected to generate total economic activity worth some P300 billion over the next six years; contribute at least 1.7 percent to the local gross domestic product (GDP); attract more than P27 billion in new parts manufacturing investments; produce at least 600,000 vehicles; and generate some 200,000 direct and indirect jobs throughout the program’s life span.

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