Pnoy's Auto Road Map

[jpdm]

Isuzu exec says proposed local automotive roadmap 'completely wrong'




By: Likha Cuevas-Miel, InterAksyon.com
December 10, 2013 4:18 PM

MANILA - A Japanese executive of Isuzu Philippines Corp has openly criticized the Aquino administration's roadmap for the automotive industry, saying the path the government wants car makers to take is "impossible".

Takashi Tomita, Isuzu Philippines' executive vice president, told reporters on Tuesday that the proposed roadmap for the industry would not encourage growth and jobs generation--something that is sorely needed in a country that has a jobless rate of 6.5 percent as of the third quarter.

When asked if Trade Secretary Gregory L. Domingo is pushing the auto industry in the wrong direction, Tomita said: "Yes. It's completely wrong."

He said the target of making 40,000 units per model for each car manufacturer to be able to enjoy incentives from the government is "impossible" to reach given the high cost of building automobiles in the Philippines.

"It's too high. No one can follow that," the Japanese executive said.

To make matters worse, the local car market is small, relative to other countries in the region. As of October this year, Thailand has already sold 1.123 million units while the Philippines has only 148,000 units.

Toyota takes the crown for being the biggest car maker in the Philippines, churning out 15,000 units of Vios model a year. But ASEAN data show that is minuscule compared to other countries.

Tomita said even though 90 percent of the vehicles they sell in the Philippines are assembled locally, the parts are still imported from Thailand and other manufacturing hubs, adding to the cost of each unit.

The All-New Isuzu D-Max that the company introduced in the local market in September is now being manufactured here starting December 4. The first batch of the pick-up trucks sold in the country were completely built units (CBU) from abroad.

The company's trucks and its Asian utility vehicle, Crosswind, are also locally manufactured. Only the Isuzu Alterra model comes in showrooms as CBUs from Thailand, the region's car manufacturing hub.

Tomita said that despite the higher manufacturing costs--which the company absorbs for the time being--Isuzu Philippines still keeps its factories in the country because "this is the future market. At 100 million population, the potential is big."

It also pays to spread one's manufacturing hubs around the region and not put everything in one basket--a painful lesson car makers learned after the Thailand flooding in 2011.

However, Tomita said that they can only bear to continue with the localization of its car manufacturing until October 2014--with the aim of sourcing 20 to 25 percent of all Isuzu vehicle parts from the Philippines. However, without government support, Tomita could not say what would be their next step after October.

"I'd rather ask the government to protect the local assembly and supply. Otherwise, other manufacturers would be like Ford," he said.

The American car maker has closed down its only Philippine plant in Sta. Rosa, Laguna in December last year as part of the company's restructuring of regional operations, high manufacturing cost and small market.

source: Isuzu exec says proposed local automotive roadmap 'completely wrong' - InterAksyon.com

[ghosthunter]

LOL.... 40,000 cars a month from EACH car maker?

To what I remember, the total cars all the car makers sell in a year in the Philippines is roughly around 150,000.

The someone is trying to sell B.S. to the public.

We have to be honest about our local car industry. It is VERY SMALL when compared to other countries.

[K.I.L.L.]

Reality has always been the problem of our government. Our government's goals for manufacturing can be summed up in three words... Delusions Of Grandeur.

[uls]

pinost ni jpdm ito yesterday:

Philippines becoming investment magnet in ASEAN ? Jetro | Manila Bulletin | Latest Breaking News | News Philippines

Tokyo, Japan – The Philippines is outpacing Southeast Asian neighbors in attracting Japanese investments, with the usual challenges of putting up businesses a thing of the past.

While other Southeast Asian countries face a number of challenges, two main constraints in the Philippines are “difficulty in local procurement of raw materials and lack of employees,” said Isamu Wakamatsu, director of the overseas research department (Asia and Oceana) of the Japan External Trade Organization (Jetro).

Other members of the Association of Southeast Asian Nations (ASEAN) face other problems like wage issues and low quality of employees.

Jetro is a government-related organization that promotes mutual trade and investment between Japan and the rest of the world.

Wakamatsu said wage issue is the number one concern of Japanese investors planning to put up businesses in Vietnam, Thailand, Indonesia and Malaysia.

“The new trend is (that) Japanese investment is growing in the ASEAN,” Wakamatsu said.

In the past, the Philippines lagged behind ASEAN neighbors in attracting Japanese investments but recent robust economic development as well as a strong economic foundation is changing that.

Based on statistics, there will be a slowdown of Japanese investments in Thailand and Indonesia, Wakamatsu said.

As for the Philippines, the prospects “will continue in a high level,” he said.

Wakamatsu’s observation echoed a separate survey conducted last year on Japanese expatriates which rated business challenges in Asia.

In the Philippines, top two issues were mentioned: difficulty in procuring raw materials and lack of employee performance.

By comparison, the main challenges in Malaysia are wage increase, operational costs and quality of employees. In Thailand, the challenges are: wage increase, competitors’ market share are growing; lack of employee performance; difficulty in hiring executive staff and high prices.

In Indonesia, wage issues, competition, difficulty in hiring qualified staff and quality of employees are the main concerns. In Vietnam, wage increase, lack of raw materials, red tape, legal problems, tax procedures and lack of quality bug potential investments.

The survey also showed the Philippines beating China and India in all departments, with wage increase, high operational costs, and quality of employees among the many concerns.

Available data from select countries show that labor restiveness remains high but this has gone down in the Philippines.

in that article Jetro didnt mention high manufacturing cost in the Phils. and the small market

In the Philippines, top two issues were mentioned: difficulty in procuring raw materials and lack of employee performance.

but the Isuzu executive cited 2 problems with the Phils. -- high manufacturing and a small market

He said the target of making 40,000 units per model for each car manufacturer to be able to enjoy incentives from the government is "impossible" to reach given the high cost of building automobiles in the Philippines.

To make matters worse, the local car market is small, relative to other countries in the region. As of October this year, Thailand has already sold 1.123 million units while the Philippines has only 148,000 units.

Toyota takes the crown for being the biggest car maker in the Philippines, churning out 15,000 units of Vios model a year. But ASEAN data show that is minuscule compared to other countries.

[uls]

Tomita said that despite the higher manufacturing costs--which the company absorbs for the time being--Isuzu Philippines still keeps its factories in the country because "this is the future market. At 100 million population, the potential is big."

a 100 million people population doesnt guarantee a big market

China has 1.35 billion people. India has almost 1.3 billion people. the US has a liittle over 300 million people

but the US is the world's biggest consumer

how can a country of 300 million people consume more than countries with over a billion people? ACCESS TO CREDIT

how many out of the 100 million Filipinos can get a car loan?

[niky]

Let's be realistic.

Tax incentives should be there for anyone building at least 1,000 units a year.

Hell... incentives should be there for anyone building anything, even in the dozens. Setting the bar at 40k per month is like asking a local carinderia to do 500,000 a day in sales.

[uls]

Let's be realistic.

Tax incentives should be there for anyone building at least 1,000 units a year.

Hell... incentives should be there for anyone building anything, even in the dozens. Setting the bar at 40k per month is like asking a local carinderia to do 500,000 a day in sales.

yeah incentives should to be given to any who creates jobs

[falken]

Reality has always been the problem of our government. Our government's goals for manufacturing can be summed up in three words... Delusions Of Grandeur.

Our gov't comes up with their decisions by guessing. Research is not an option.

Sent from my Nexus 7 using Tapatalk 2

[Walter]

That's a big IF.

[uls]

jpdm has been posting press releases for more than 5 years

[ocanursjr]

Hi jpdm... How's everything? Happy New Year!!!

Good news for auto parts maker means good for economy.

[jpdm]

Happy New year oca!

Admittedly, uls is correct. Ive been posting press releases coming from DTI, parts makers and other auto players and yet nothing has happened so far. Its already 2014 and the auto program called MVDP of Arroyo is now known as auto road map under Aquino is still on the drawing board.

Puro planning na lang..

Anyway, I will just hope na lang.:old:

[ocanursjr]

Happy New year oca!

Admittedly, uls is correct. Ive been posting press releases coming from DTI, parts makers and other auto players and yet nothing has happened so far. Its already 2014 and the auto program called MVDP of Arroyo is now known as auto road map under Aquino is still on the drawing board.

Puro planning na lang..

Anyway, I will just hope na lang.:old:

In fact, wala talagang aasahan sa Gobiernong PigNOY at puro drawing lang.

[Monseratto]

Hintayin nila Nognog's roadmap...Since start ng election fever na next year, I doubt the auto industry will be on the administration's mind...

Posted via Tsikot Mobile App

[jpdm]

Palace approves new auto industry program


by Catherine Pillas
June 1, 2015

Malacañang has approved the much-awaited Comprehensive Automotive Resurgence Strategy (CARS) Program, which will provide the local auto industry a total of $600 million worth of incentives over a six-year span.

The program seeks to ramp up the competitiveness of the local auto industry amid the Asean integration and attract P27 billion worth of vehicle-manufacturing investments into the Philippines.

“The program is designed to build and grow the parts-making capability of the auto industry, for without a robust parts-making industry, our carmaking industry will remain uncompetitive. The CARS Program is about building capabilities and jobs to make our automotive manufacturing industry competitive in the Asean,” Trade Secretary Gregory L. Domingo said in the statement.

The program will stimulate economic activity estimated at P300 billion over the six-year period starting 2016. The resulting contribution to gross domestic product (GDP) is estimated at about 1.7 percent.

The annual dole-out of $100 million, or an average of P4.5 billion yearly from 2016 to 2021, will be used to support three vehicle models. This is also expected to attract more than P27 billion in new parts-manufacturing investments and allow the local production of at least 600,000 vehicles.

The $600 million will be sourced from the national budget. According to Trade Undersecretary and Board of Investments (BOI) Managing Head Adrian S. Cristobal Jr., the amount can still be added in the 2016 national budget as deliberations in Congress for the new budget bill have yet to start.

The CARS Program, an initiative of the Department of Trade and Industry (DTI) through the BOI, calls for the grant of fiscal and nonfiscal incentives to the automotive industry to entice manufacturers to initiate more operations in the country.

http://www.businessmirror.com.ph/pal...ustry-program/

[dos2]

^
Well this is good news.
Hopefully the terms would be attractive enough for investors to establish production sites in the country.
Filipinos badly needed these additional jobs! ! !

[Monseratto]

Not sure if there is enough time to get that program off the ground. There is no gurantee there'll be continuity with the next adminstration come next year...

[Ry_Tower]

Also, 3 cars lang ang supported. I guess it will be the vios, avanza and innova.

O baka makasingit L300. hehehe

[machine.pistol]

I'm also dreaming of the day when jeepneys and tricycles eventually become extinct. But then it's a socio-economic problem that legislation to phase them out just would not work.