RP Can Still Catch Up as Auto Production Hub for ASEAN

November 3, 2008 by Tsikot

The Philippines can still catch on with its dream of becoming an automotive manufacturing hub in the region because Thailand cannot fully serve the requirements of a region with 600 million population and a faster growing economy.

Ford Group Philippines Chairman Henry Co said this in his presentation during a Local Government Conference for Sustained Philippine Competitiveness.

“It is not too late, we have the capability to develop one. We can still become the United States of ASEAN,” Co said.

In a region of 600 million with some of the faster growing economies in the world, he said, there is an opportunity for another country other than Thailand to be a manufacturing hub for automobiles.

“The Philippines alone with its 90 million population needs a manufacturing industry,” he said.

To support his idea, Co presented a data from the Bureau of Export and Trade Promotion showing the rising number of imported completely built-up motor vehicles.

The data showed that CBU imports reached 230,000 units in 2003 and 2004 while exports of locally-assembled CBU units were only slightly over 150,000 units. Imports surged in 2005 to 310,000 units but CBU exports slightly improved only to 170,000 units.

In 2006, CBU imports went up to 460,000 units while exports substantially declined to 90,000 units.

“But giving up local manufacturing and maintaining a status quo of the present situation are not options,” Co said.

Co cited the economic value that the manufacturing chain of assembling cars could create.

“If no one builds cars, no one will make seats, aluminum wheels, wiring harnesses, brake tubes, castings, stamping parts, paint, chemicals, glass, etc.” he said.

To push for the automotive program, Co said there are only two models for development: the government subsidizing a national car program like the Malaysian model or encouraging auto multinationals to invest here like the Thailand model.

So far, the highest level of automotive parts manufacturing in the local industry is engine and transmission assembly.

There also other related industries like seats, seat frames, foam pads, seat covers, interior trims, door sidings, carpets, molded and extruded rubber, tires, AI, steel wheels, wiring harness, batteries, starter, alternator motor, small and some large plastic injection, small stamping parts, insulation, paints, sealers and other chemicals.

To help push for this industry’s development, Co also urged the LGUs to create an enabling environment to nurture and promote more manufacturing activity.

“Build confidence and stable environment,” Co told the LGU executives.

By Bernie Cahiles-Magkilat, Manila Bulletin Online

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