Locals seen producing bulk of modern PUVs

The Board of Investments (BOI) plans to tap local players for the production of 140,000 modern public utility vehicles (PUVs), while an additional 60,000 units will be slated for transport operators to import, officials said.

In a press conference on Friday, BOI Managing Head and Trade Undersecretary Ceferino Rodolfo said the government was pursuing an “open market” approach, wherein transport operators would be allowed to import vehicles abroad.

The Duterte administration is pushing for a PUV modernization program that will involve replacing the current fleet of around 200,000 PUVs over the next few years. BOI, for its part, is coming up with a program to encourage local players to supply modern PUVs.

“We won’t do a manufacturing solution in a protected environment. We’re done with that. We will compete here. It’s an open competition. We won’t stop operators from importing vehicles, but we will help local manufacturers so they could compete,” he said.

Officials held the press conference in light of the upcoming Philippine Auto Parts Expo next month. While last year featured prototypes, this time the expo will feature ready-to-sell products, according to Ferdinand I. Raquelsantos, president of the Parts Makers Association Inc.

Marissa Concepcion, who is program manager for a similar automotive manufacturing scheme called the CARS program, said that most of the PUV replacements would come from local players.

However, a group of local body-building firms, which includes Centro Manufacturing Corp. and Almazora Motor Corp., have only locally produced around 3,000 units so far, according to Vicente Mills, president of the Automotive Body Manufacturers Association of the Philippines.

“[It] will be done in an open market. It’s impossible for us to increase that capacity from [3,000] to a volume that can supply [that]. So our initial estimate is we’ll be able to supply 140,000 of the 200,000,” Concepcion said.

The Bureau of Philippine Standards has classified these PUVs in four categories, depending on the seat capacity, among other factors. The latest update on these categories, which was hinted at during the press conference, is yet to be published.

Out of the 140,000 units, she said 80,000 units would be classified under class 2 and 3, which could carry at least 23 passengers. These are the categories, she said, that would receive “fiscal support.”

“In the program we’re designing right now, the only factors that we will support is the class 2 and 3. [That’s because] the class 1 is more or less the [standard] product you see,” she said.

Raquelsantos likened the class 1 PUV to the old L300 model of Mitsubishi Motors Philippines Corp.

“We think we should be able to deliver the 80,000 [units] in 2022,” Concepcion added.

Mills said there were around 3,000 units in their factories right now.

“When this program started, it’s supposed to produce 200,000 units over the next three to five years. While the programs to expand our factories are still being developed, right now this 3,000 or so [units] to be delivered to transport operators are still in our present factories,” he said.

Rodolfo hinted that local players might have an edge over PUV importers in terms of after-sales service.