DTI in talks with 3rd player in CARS program

MANILA, Philippines – Amending the provisions under the Comprehensive Automotive Resurgence Strategy (CARS) will not be necessary anymore as the government finds a third car manufacturer to fill up the program’s last available slot.

“We now have a prospective third player. Hopefully it works out,” Board of Investments chairman and Trade Secretary Ramon Lopez said, without disclosing the name of the car maker.

Lopez said the car maker and the government have had preliminary talks wherein the former expressed interest in participating in the country’s automotive resurgence program.

He said the automotive player has no apprehensions about meeting the stringent requirements of program.

Under the CARS program, three local car assemblers may apply for fiscal support by locally assembling new vehicle models, with a commitment to produce 200,000 units for each model during its six-year model life.

The program, signed by former president Benigno Aquino III under EO 182, seeks to boost the country’s automotive manufacturing industry by providing P27 billion worth of incentives to local automotive assemblers.

So far, however, only Toyota Motor Philippines Corp. (TMP) and Mitsubishi Motors Philippines Corp. (MMPC) have applied and have been approved for the program.

Other automotive players have expressed interest to partake in the program but were unable to join as they cannot meet the volume production requirement.

TMP and MMPC officials earlier raised concern regarding potential changes planned on the rules and requirements of the CARS program to accommodate a third player, saying the government should not change rules in the middle of the game.

Lopez, who earlier raised the possibility of lowering the required volume on the back of lower incentives, said tweaking the existing rules and requirements would not be necessary anymore.

“We will not be changing the rules anymore. Before we thought about studying that because we cannot find a third player, but now we have a candidate for a third slot, there is no need to change it,” he said.

“Bottomline is we encourage people, even one or two companies and now we have two, to have a higher local content that will hopefully jumpstart the car parts industry, strengthen that, and have economies of scale to have our own car program,” Lopez added.