Tough CARS rules to stay, says BOI

THE BOARD of Investments said it would not relax the stiff  requirements that the government had set for the Comprehensive Automotive Resurgence Strategy (CARS) program to accommodate a third player.

BOI managing head Ceferino S. Rodolfo said on Friday that there were players who had expressed interest to fill up the third slot for the program but had sought certain flexibility, particularly in the production volume requirement.

The CARS program provides a generous incentive package worth P27 billion for three models that will be enrolled. The first two slots have been filled by Toyota Motor Philippines, with the Vios model and Mitsubishi Motors Philippines Corp., with the Mirage. The third slot remains open to this day.

The basic requirements for participation include the production of 200,000 units of a single model over a six-year period and investments in the manufacture of large body parts.

For a market like the Philippines, this was deemed a tall order as total demand for vehicles last year reached only about 288,000 units.

“There were those that sought for lower volume requirement but this means they have a small ambition,” Rodolfo said.

“We can’t relax the requirements set in the executive order. The volume requirement and the physical plant requirement were critical. If you invest in such facilities, you will be able to meet the required volume and you will do everything you can to hit it, otherwise, you won’t be able to recover your investments in those facilities,” he said.

“They’re asking for allowances. But it’s just about them raising their ambition to match that of the government’s. It’s not for us to change what is stated in the executive order, unless another EO is issued. For now, we will not bring down the requirement,” he added.

The BOI has yet to decide whether or not there remains a need to open  the third slot under the CARS program.