SOON to be released is a road map for the Philippine’s automotive industry as the government finds measures on how incentives can be given to local car manufacturers without reducing excise taxes.
According to Board of Investments (BOI) Executive Director Lucita Reyes in a recent press, the government is holding consultations for the road map, which will promote the development of local manufacturing of vehicles.
Moreover, it is strategising to develop local manufacturing as well as make locally produced cars more affordable without reducing the excise taxes imposed on these vehicles.
Whilst, the excise taxes on local cars can help local assemblers but implementation which would still require a legislative measure, said Reyes.
The director also cited that refleeting of vehicles that are 10 years and above may be considered in place of lowering the excise taxes, and such move could boost the market for new local cars. She said that an estimated 1.7 million of the total 3.1 million vehicles registered with the Land Transportation Office (LTO) are more than 10 years old.
The use of new technology or the manufacture of alternative fuel vehicles is also being studied and included in the Investment Priorities Plan.
She added that the government is keen to developing the local manufacture of cars as it contributes to the economy by providing direct employment to some 868,000 individuals.
Last year, more imported cars were sold in the country compared to those locally produced with the ratio at 52:48; one of the reasons that volume of imported cars are bigger than those that are locally produced are the small market for vehicles and fewer available parts and components, she said.
The Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI) and the Association of Vehicle Importers and Distributors, Inc. (AVID) are also actively promoting the local auto industry; both organisations expressing optimism for the industry this year.
CAMPI President Rommel Gutierrez said that optimism is building up especially since the government is looking after the after the CKD (completely knocked down) and CBU (completely built units) sectors, adding that total industry sales are expected to rise 10% percent this year from last year, due to the country’s favourable economic condition.
Last year, there were 184,248 units sold with total vehicle sales posted an 11.6% increase from 2011 due to the strong demand for both passenger cars and commercial vehicles, according to data from AVID and CAMPI.
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