Car makers want to retain 20% tariff on imported cars

MANILA, Philippines - Car assemblers and manufacturers are pushing for the retention of the 20 percent tariff imposed on imported vehicles from Japan with engine displacement of three liters and below as the Japan-Philippines Economic Partnership Agreement (JPEPA) is under review.

“The position of the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) is to keep the tariff at 20 percent for (vehicles with engines) three liters and below to protect the local industry,” CAMPI president Roque Rommel Gutierrez told reporters on the sidelines of the 4th Philippine International Motor Show Media Awards late Friday.

A general review of the JPEPA which came into effect in 2008, is currently ongoing.

The JPEPA seeks to facilitate trade and investment between the two countries. Among others, it will promote free trans-border of goods through tariff reduction.

Under the JPEPA, imported cars from Japan with engine displacement higher than three liters are exempt from payment of duties.

Gutierrez said they would want the tariff imposed on completely built units from Japan with an engine displacement three liters and below to be kept since vehicles being assembled locally have engines below three liters.

“If the tariff will not be retained, local manufacturing will be less competitive,” he said.

For his part, Arthur Balmadrid, senior vice president for corporate business division at Isuzu Philippines Corp. (IPC) said in the same event they would like the automotive industry road map to be approved so that local car assemblers would be able to enjoy incentives that will allow them to be competitive.

“We want the road map to be approved because we don’t want to have nothing left to assemble here,” he said.

He cited that while there are car assemblers in the Philippines, not all the offerings being sold here are produced locally, since some vehicles can be manufactured at lower costs in other countries.

IPC produces most of the cars it is selling domestically, except for the Alterra.

Balmadrid said that while the company initially intended to manufacture the Alterra locally, it could not do so considering costs.

He said car assemblers in the country would also want to be able to manufacture vehicles for export but noted that it would be difficult at the moment. “We need immediate support. We need incentives,” he said.