SKD, CKD or CBU?

[basti08]

which do you prefer?

also, in line with the question ive read an article regarding the revival of the "people's car program" in the 90s, offering a brand new vehicle at SECOND HAND PRICES but with a high local content.

here's the article from Philstar:
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Auto parts makers push revival of People’s Car Program
By Marianne V. Go
The Philippine Star 07/31/2006

The Motor Vehicle Parts Manufacturers Association of the Philippines (MVPMAP) is spearheading a revival of the glory days of the Philippine automotive industry through a new People’s Car Program.

Under the scheme, the MVPMAP is proposing to introduce a brand-new vehicle at the price of a second-hand car but with a high level of local content.

The MVPMAP board met recently with local car and truck assemblers, the Department of Trade and Industry, the Board of Investments, the Tariff Commission, the Export Processing Zone Authority, Sen. Richard Gordon, chairman of the Senate Committee on Transportation and his counterpart in the House, Rep. John Cua, to discuss a revival of the People’s Car Program.

According to the MVPMAP, the Philippine automotive industry had its heydays in 1996 when 141,000 units of completely knocked down (CKD) vehicles (87 percent) and 21,000 units of completely built up (CBU) cars (13 percent) were produced.

It was also a boom year for the local auto parts makers as well, as the production of 162,000 units was the highest ever.

Back then, there were very few CBU units, the MVPMAP pointed out. CKD assembly use a lot of local parts compared to the CBU units which have no local component at all.

However, last year, the industry sold only 57,500 CKD units (59 percent) and 39,500 CBU units (41 percent) for a total of 97,000 units, the group lamented. Auto sales have been virtually flat over the last eight years.

More significantly, the sale of CBU vehicles last year was the highest on record, hurting the local parts makers in the process.

During the forum, MVPMAP chairman emeritus Feliciano Torres argued that the trend of increasing CBU importation is not bad as long as it is not misconstrued as the real reason why CKD production is not increasing.

The sale of CBU units have grown from only 8,200 units in 1998 to 39,500 units in 2005. It grew the most in 2004 when CBU sales doubled from 15,000 in 2003 to 30,400 units.

The MVPMAP expected to benefit from what was originally planned by the government as an Automotive Industry Program to generate sales of 200,000 CKD units and 100,000 CBU units by 2007.

Unfortunately, a year away from the end of the target period, automotive industry sales stood at just a third of that level.

The Philippine vehicle industry, the MVPMAP observed, has been overtaken and left behind by its ASEAN neighbors.

The local parts makers are hence pushing for the revival of the People’s Car Program, proposing a brand-new vehicle at the price of a second-hand car but with a high level of local content like an updated version of the affordable and highly-successful Asian utility vehicle (AUV).

From the car assemblers, the local parts makers are asking them to take the lead role in the design and development of the new People’s Car, incorporating whatever parts the local parts makers can possibly supply that conforms to the assemblers’ quality, cost and delivery requirements.

From the government, the MVPMAP is asking for support, protection and incentives, specifically putting a stop to the importation of used vehicles.

Philippine Automotive Federation Inc. (PAFI) president Vicente Mills agreed that government "must have a vision of where it wants the local auto industry to be 10 to 20 years from now."

Mills added that there has to be a joint development of lower entry vehicles from the assemblers’ principals abroad.

"We need to focus on the development and production of vehicles affordable to Filipinos," Mills stressed.

Rep. Cua cited that one of the Philippines’ top export industry, aside from electronics, is the automotive industry.

Thus, the revival of the automotive industry should be supported by the government.

However, Cua urged local parts makers to propose strategies for its development.

Sen. Gordon, for his part, encouraged the industry to present to the government development programs and strategies, how to implement them and make them viable.

"They need a voice, they have to let everyone know what is ailing them and what help they need. More importantly, the industry players need to work together to come up with comprehensive plans and programs for the development of the industry," he said.

He addded that if the automotive industry expects to survive in a borderless trade environment, all must close ranks and rebuild the industry one brick at a time.

On the government side, there is a need to consistently implement laws and regulations, especially since, as one participant observed, "the difference between the Philippines and its ASEAN neighbors is the manner by which government policies are being managed and implemented."
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[OTEP]

Depende pa din sa country of origin.

SKD is basically a CBU with no tires and battery.

[basti08]

diba CKD means cheaper and more healthy to our economy (more jobs, more local investors) and also to the consumers (lower prices due to less tax).

[alwayz_yummy]

kalimitang nag-CBU units ung mga walang plant dito: GM,subaru, most german and american brands, except ford....at ung models ng ating popular brands na di nilalabas ng planta:evo8/9, previa, murano, etc...

[Blackraven]

evo8/9, previa, murano, etc...

These are better off as CBU from Japan

The ones that would most likely be recommended for local production (CKD, SKD or ground-up) are those that are more mainstream (Corolla Altis, Sentra, Mazda 3, Ford Focus).

But then again, it's not that simple though (depende sa country of origin, quality of manufacturing, etc.)

IMO I wouldn't mind if the upcoming Camry would be built here locally and this is because Toyota Phils. has spent more than 20 million pesos to upgrade its facilities thus meaning much better quality control. Same goes with Ford if they ever release a Mondeo for us, then they can produce it here (since Ford Group Phils. factory is very high quality). Same goes for the already-efficient Nissan factory of NMPI and they even announce to spend 10 million pesos to upgrade again as they will produce a Minivan/MPV by next year.

Yet however, I still don't want a locally-assembled Honda Accord. HCPI is still known for producing lemon units and despite this, they didn't announce any plan to upgrade and improve thinking that they can sell a great model by hiding their quality and flawed manufacturing. HCPI thinks they can fool us with sub-par build quality/reliability but I won't be fooled by such antics.

As stated in the other thread, if HCPI doesn't shape up ASAP, then I'd rather buy Honda vehicles that are made in Malaysia, Thailand or better yet....from Suzuka, Japan (top-class Honda factory in Japan)

Based on the current situation, imported Honda CBU vehicles are generally better than what HCPI makes locally.

[Blackraven]

I don't want to see this vehicle made locally.



If they don't shape up, then why the hell would I buy a locally-made Honda Elysion that has crappy build quality/reliability???

Thinking that they can just make it here and say that it was built good because it is luxurious and has lots of premium features yet, present with lots of vehicle problems.

Sure, the vehicle is premium but the factory that makes it IS NOT premium. Heck, doesn't even come close to decent.

Seriously, if ever this comes to our shores, we'd all hope that this would be in the form of a CBU import from Japan.

I guess in the end, my verdict is, a premium vehicle may be possibly manufactured here...........except for Honda.

I hope that by next year, Honda Philippines would start bringing a few more CBU vehicles from Japan

[romski123]

I think this is worth looking at:



November 8, 2006

[SIZE=5]Local parts makers push for PhUV incentives[/SIZE]

[SIZE=4]Local parts makers are pushing for the government to grant incentives to all the participants in their proposed Philippine Utility Vehicle (PhUV) Program. The PhUV Program proposes the production from completely-knocked down (CKD) kits of brand-new vehicles at the price of a used vehicle but with a high level of value-added local parts.[/SIZE]

[SIZE=4]They cite as an example Malaysia, which imposes zero percent import duty on vehicles produced from CKD kits but charges a higher 5% for vehicles imported as completely-built units (CBU). CKD kits have value-added local parts while there is none in a CBU kit. Local parts makers believe this could also be done as a PhUV Program incentive to help the ailing local parts industry.[/SIZE]

[SIZE=4]Thailand on the other hand, which is the biggest auto industry in the Asean region, decided to focus on a niche market: the one-ton pickup and its various variants, some of them SUVs. While they imposed a 30% excise tax for passenger cars, they charged only a very low 3% for the pickup. [/SIZE]

[SIZE=4]It also imposed a very stiff 80% tariff for passenger cars imported CBU outside of the Asean region while only a lower 30% is charged for the same vehicle imported in CKD form from outside of the Asean region. Even its future MFN rates under AFTA/CEPT are 40% to 80% for CBU and only 30% for CKD.[/SIZE]

[SIZE=4]These incentives made Thailand the biggest pickup market in the world outside of the USA. The local parts makers think that the same could also be done for the PhUV Program to reduce its price and make it affordable.[/SIZE]

[SIZE=4]Furthermore, Thailand also offers excise tax incentives for vehicles with energy saving devices (10% instead of 30%) and those running on alternative fuel (20% instead of 30%). Again, the local parts makers say this could be an incentive for users to decide to buy a PhUV. Other incentives they have in mind would be lower LTO registration fees and lower interest rates from banks for car financing so as to spur PhUV sales.[/SIZE]

[SIZE=4]Next door neighbor Indonesia has a Taxes & Tariff Liberalization Program that charges CKD kits taxes and tariff over 50% lower than CBU importations. Examples are for sedan type cars, it is only 25% for CKD but 60% for CBU; for SUV and pickup, it is only 20% for CKD but 45% for CBU and for buses, it is only 20% for CKD but 40% for CBU. This large disparity in taxes and tariff could be applied locally so that assemblers can be encouraged to import and manufacture vehicles in CKD form and thus help revive the moribund local parts industry.[/SIZE]

[SIZE=4]Local parts makers are pinning their hopes on the government adopting some of these incentives granted by the Philippines’ Asean neighbors to its auto industry. For a start, they are proposing that in the meantime, BOI incentives be given to local parts makers participating in the PhUV Program similar to those extended to BOI-registered enterprises under the Investment Priorities Plan (IPP) of 2004. The incentive package includes income tax holiday for up to six years, duty-free or duty reduced importation of capital equipment, tax and duty-free importation of spare parts and supplies and tax credit on raw materials and supplies. [/SIZE]

[SIZE=4]For the last few successive years, Philippine vehicle industry sales are not expected to grow or even surpass the 100,000-unit sales level, and with the expected increase in assemblers’ CBU importations, local parts makers and some 28,000 workers dependent on them are hoping that the PhUV Program can finally take off with a package of incentives and ease their burden.[/SIZE]

[mazdamazda]

Only Ford is manufacturing vehicles here from the ground up (Focus, Mazda3, Tribute, Escape)... all other car "manufacturers" are just assembling CKD vehicles or importing CBUs (made possible by the AFTA).

I am surprised why the bigger car manufacturers (especially Toyota) isn't making the Philippines as the manufacturing hub for one of their vehicle line-up?

[BlueBimmer]

CBU ako. mahirap ung matyempuhan ka ng labor problems dto then magkaproblema unit mo..

[bajumbo]

CBU ako. mahirap ung matyempuhan ka ng labor problems dto then magkaproblema unit mo..

E paano naman kung matyempuhan ng labor problems sa pinagkunang bansa?

E di di na natin pede isoli din?