DTI amenable to extending CARS program

MANILA, Philippines — The Department of Trade and Industry (DTI) is open to extending for three years an incentives program for the automotive industry to comply with participants’ production targets given the downturn in vehicle sales due to the pandemic.

“(Extending for) three years, we’re open, if that is what the automotive industry wants,” Trade Undersecretary Ceferino Rodolfo told reporters.

Last month, Toyota Motor Philippines Corp. (TMP) chairman Alfred Ty said the firm is hoping the government would extend the Comprehensive Automotive Resurgence Strategy (CARS) program for three years to enable the participants to meet their volume commitments amid the impact of the coronavirus disease 2019 (COVID-19) pandemic.

TMP has enrolled the Vios sedan model in the CARS, while Mitsubishi Motors Philippines Corp. has the Mirage as its entry.

To get incentives from the government, CARS participants need to make investments for the assembly of the enrolled vehicle model and produce at least 200,000 units within six years.

As the COVID crisis has made it impossible to meet production commitments under the CARS, Rodolfo said the government would be providing reprieve to participating firms through a longer time to comply with production targets.

“If it’s just the time, we can adjust, especially now we’re not sure how long will it take to recover,” he said.

He said the government would be issuing an executive order for the extension to be given to CARS participants.

Taal Volcano’s eruption at the start of the year and the ongoing pandemic have affected both demand for vehicles and sales.

As of end-November, sales of the Chamber of Automotive Manufacturers of the Philippines Inc. dropped 41.6 percent to 196,197 units from 336,226 units in the same period last year.

Meanwhile, sales of the Association of Vehicle Importers and Distributors Inc. declined 42.6 percent to 40,993 units as of end-October from the 71,362 units sold a year ago.

“We are still monitoring carefully what will happen during the first quarter to see if there will be more definite direction in terms of trajectory of recovery for the auto industry,” Rodolfo said.