Toyota, Mitsubishi nix changes to CARS

MANILA, Philippines – Automotive giants Toyota Motor Philippines Corp. (TMP) and Mitsubishi Motors Philippines Corp. (MMPC) are seeking to put the brakes on changes being planned by the government on the rules and requirements of the country’s automotive resurgence program.

“To fill up the third slot is good for the industry. We’re open to exploring it (changes), but we have partners internationally to explain to and the second player (Mitsubishi) also has. We’re not just doing it locally, this also has an international component so a level playing field is important. Not changing the rules in the middle of the game is very important so those are the things we have to be careful about,” TMP vice chairman Alfred Ty told The STAR.

“We have to be even with all. It is not alright that one is different from the others because the volume carries in it the investments you put in the country. So if you reduce it that means you reduce your investments also so how does that work,” Ty added.

Although Trade Secretary Ramon Lopez in an earlier interview said there are no plans of amending the requirements of the Comprehensive Automotive Resurgence Strategy (CARS) program just yet, he noted that a minor tweak such as lowering the required volume on the back of lower incentives is an option being considered in the future as to attract car makers to fill up the third and last available slot.

“Maybe down the road we may consider scaling down, but that is not yet sure. If and when you do that, of course there should be a corresponding deduction on their incentives so that it will be fair for the two which were able to comply with the initial requirements. We are not saying we will amend. These are just the ideas we’re considering moving forward,” Lopez said.

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 TTMP and MMPC  have applied and have been approved for the automotive resurgence program.

“It is not a matter of being fair or unfair,” MMPC first vice president and corporate secretary Dante Santos told The STAR when asked about a possible scaling down of the volume requirement under the CARS program.

“The CARS follow the prescription of the Executive Order, the Implementing Rules and Regulations and the DTI/BOI terms and conditions.  These requisites cannot be arbitrarily disregarded, amended now watered down because these requirement were dutifully complied with by my company,” Santos said.

MMPC has committed to invest around P4.3 billion to set up its new production line for the Mirage model which is the firm’s entry into the CARS program.

TMP, meanwhile, is making an initial investment of P3.22 billion and has enrolled an all new Vios model for the program.

Isuzu Philippines Corp. marketing head Joseph Bautista  said the company will study participating in the CARS program should the volume requirement be lowered to anywhere between 50,000 to 100,000 units.

“We would like to see the final proposal before we commit. As we said in the past, it will be very difficult for us to reach the 200,000 units. We are a small commercial vehicle manufacturer,” Bautista said.