DTI preparing safeguard measures on auto imports

The Department of Trade and Industry is preparing to issue safeguard measures to protect the local automotive industry from imports, an official said over the weekend.

Board of Investments managing head Ceferino Rodolfo, who also serves as DTI undersecretary, said the agency would  submit the plan to Trade Secretary Ramon Lopez for final approval before the end of the year.

Rodolfo said the results of a preliminary investigation showed a need to subject car and other vehicle imports to definitive safeguard duties to protect the local industry.

“The safeguards are meant to protect the local industry. Right now, we’re trying to balance the benefits and effects, notwithstanding whether the vehicle is imported or locally-assembled,” he said.

He said the government considered the difficulty faced by automotive companies as they were trying to recover from the crisis.

Vehicle sales were down by at least 40 percent in the first 11 months from a year ago.

Data from the Chamber of Automotive Manufacturers of the Philippines Inc. and the Truck Manufacturers Association showed automotive sales fell 41.6 percent in the 11-month period to 196,197 units from 336,226 units in the same period last year.

The two industry groups said sales in November were also down 33 percent to 23,162 units from 34,465 units delivered a year earlier.  The data did not include those reported by other industry groups such as the Association of Vehicle Importers and Distributors.

Rodolfo said the BOI would determine the appropriate rate of safeguard duties on imported vehicles and the timeline of the measure based on the Trade Remedy law.

“We already expect there will be no investments in the automotive sector during these times. We’re done with the technical and legal issues.  We’re trying to wrap-up the political and national interest side,” he said.

Rodolfo said that under the plan,  only special-purpose vehicles such as ambulances and funeral hearses would be spared from the safeguard duties.

Meanwhile, Rodolfo said the DTI was considering a proposal to extend the effectivity of the Comprehensive Automotive Resurgence Strategy program  by another three years for registered participants to catch up with sales and production following the imposition of strict lockdown measures during the pandemic that practically stalled economic activities in the country.

Rodolfo said the duration of compliance with the CARS program was immaterial at the moment. “What is important is the capacity of participants to deliver the required volume within the extended timeframe.”

He said CARS participants already put in the required investments to upgrade local vehicle manufacturing to increase production and sales.

“I think it wouldn’t matter if both enrolled models will undergo full model change so long as the volume required under the program is achieved,” he said.

Toyota Vios and Mitsubishi Mirage are the only two enrolled models under the CARS program where the participating car makers should sell at least 200,000 units in six years to secure fiscal incentives from the government.