The Trade Department may scale down the volume of vehicle production required to qualify for the biggest automotive incentives program of the government to accommodate a third car company.
Trade Secretary Ramon Lopez said several car companies expressed interest to participate in the Comprehensive Automotive Resurgence Strategy program but lacked the capacity to produce the required volume of 200,000 units within the six-year life of the program.
“Maybe down the road, we will scale down. If and when we decide to do this, this should have a corresponding reduction in incentives also,” he said over the weekend.
Lopez said the department was reviewing the program to determine what could de done to encourage another car company to deliver the mandatory volume.
“I’m not saying that we are amending or we will amend the program which is an executive order. What we are trying to convey is that we are studying where we can innovate,” he said.
The program’s goal rests not solely on the participation of automotive manufacturers but also the involvement of parts suppliers and company unions.
Suppliers are expected to contribute in terms of employment and the benefits to micro, small and medium scale enterprises.
So far, only Toyota Motors Philippines Corp. and Mitsubishi Motor Philippines Corp. have qualified to particpate in the program.
Both companies have rolled out their expansions projects within the timeline of CARS.
Combined investments of Toyota and Mitsubishi in the program are expected to initially reach P7.52 billion.
Toyota and Mitsubshi have started building a press shop—the single biggest component in the investment.
The CARS program aims to generate 200,000 new jobs, bring in fresh investments worth $1.2 billion, stimulate local demand by increasing vehicle sales to $9.2 billion and revitalize the Philippine automotive industry.
The government is launching the program to bring about resurgence of the automotive manufacturing industry and prime the Philippines as another regional automotive manufacturing hub.
Meanwhile, the department is preparing for the next resurgence program that aims to reinvigorate the manufacturing sector that has the capability to generate hundreds of thousands jobs.