TWO CAR COMPANIES participating in a government incentives program to support domestic parts production have manufactured just over a third of their target as of May, the Trade department said.
Toyota Motor Philippines Corp. and Mitsubishi Motors Philippines Corp. are participating in the Comprehensive Automotive Resurgence Strategy (CARS) program, which offers fiscal support to car companies that each produce 200,000 units of high-volume car models in the country over a six-year period.
The two companies have produced a total of 147,000 vehicles by May 2021, Trade Secretary Ramon M. Lopez said in a manufacturing summit on Wednesday.
Mitsubishi has a 2023 deadline to meet the local production target for its Mirage compact car, while Toyota has until 2024 to produce its Vios model in the country.
“The CARS program today has generated P9.1 billion in capex (capital expenditure) investments,” Mr. Lopez said, noting that the program has created 100,000 jobs and registered nine parts makers.
The program has also saved the economy $700 million in foreign exchange as of June, and it can save the economy another $1 billion in foreign exchange by 2024, he said.
The program covers body shell assembly, large plastic assembly, and common parts production.
The government is considering a three-year extension of the compliance period after an auto industry group asked for a review due to a sales slump amid the pandemic. The 200,000-unit requirement will be retained.
Car sales in 2020 declined 39.5% to 223,793 units, according to the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and Truck Manufacturers Association.
Sales have so far improved in 2021 as total vehicle sales surged by 46.1% to 154,265 units in the first seven months compared with the low base in 2020.
Mr. Lopez said the department’s electric vehicle strategy builds on the CARS program.
“We are preparing the electric vehicle (EV) investment strategy to attract investments in key activities critical to the industry’s development such as the EV assembly, auto electronic and other parts manufacturing, EV battery charging and energy storage systems manufacturing, battery recycling, and engineering service outsourcing,” he said.
The Bureau of Customs earlier this month told car manufacturers receiving support under the CARS program to present tax payment certificates within 30 days in order to avail of incentives. — Jenina P. Ibañez