Support the Local Auto Industry

[True Faith]

Business Mirror
November 7, 2008


[SIZE=3]Support for Local Auto Assembly Industry Pushed[/SIZE]
by Butch Fernandez/reporter




The government must effect drastic policy shifts if the ailing Philippine automotive-assembly industry is to be revived, according to Sen. Loren Legarda.


In a statement, Legarda expressed her concern over the growing number of vehicles the country imports each year vis-à-vis the number of locally assembled vehicles it exports.


She cited data used by a top official of Ford Group Philippines in lamenting the sorry state of the local automotive-assembly sector.


“The Philippines used to be an assembly hub of vehicles for export to other nations. But not anymore,” Legarda lamented, adding that “the number of CBU [completely built unit] imports does not lie.”


The senator pointed to data from the Bureau of Export and Trade Promotion as cited by Ford that Philippine CBU imports went up to 460,000 units while exports declined substantially to 90,000 in 2006.


She recalled that in 2005, the country’s CBU imports surged to 310,000 units from 230,000 units in 2003 and 2004. In contrast, Philippine CBU exports improved only slightly to 170,000 units in 2005 from 150,000 units the previous year.


“These numbers must translate to massive job losses in the local automotive-assembly industry,” Legarda said. “It is sad because a few decades back, the Philippines was looking forward to becoming a complete automotive-assembly hub by aspiring to build vehicles from scratch or from raw materials such as steel, instead of just assembling them from knocked-down parts coming from abroad.”


She added that a study by Frost & Sullivan on the Philippine automotive industry said that market liberalization has made CBUs more attractive to sellers and buyers compared with locally assembled and manufactured vehicles.


It pointed out that liberalization of the automotive industry will make some vehicle assemblers and component manufacturers redundant.

The government should support local assemblers of vehicles in the Philippines in order to save thousands of jobs and employment in the country...

CBUs should be taxed heavily to discourage importation and help existing assemblers to survive..

Do you think its a good proposition?

[meledson]

It will be too expensive for local manufacturers to set up their plant to manufacture all kinds/type of cars they are selling. They have to go CBU to save on cost.

The PH market is still too small.

Ang dapat i-bawal ay ang importation ng mga 2nd hand vehicles lalo na iyong i-convert pa mula sa right hand drive. IMHO.

[uls]

mas madali mag import ng buo kesa mag assemble

mas cost effective

you need to employ more people for assembling

more people = more chances of KMU infiltration = welga

Car companies here already got burned by that before

[meledson]

We can have the car manufacturers located at PEZA sites para they have the tax perks. Iyon lnag nga the bulk of the produce will be for export. If I remember correctly, 10% lang ang limit for local sales.

Sa PEZA sites, wala yata or bawal ang welga.

[niky]

I remember that... I even know a few who lost their (high-paying, high-perks) jobs, who are lamenting ever joining that stupid union.

----

The problem really, is that in the interest of spurring free trade, we've already signed into the South-East Asian pact that makes CBUs from Thailand and Indonesia (much bigger markets than us) cheaper.

CBUs from outside are already heavily taxed... ever wonder why Kia and Hyundai products are so expensive?

As for secondhands? I can't really agree with that. While it is hurting the industry, a blanket ban on secondhand imports strains the bounds of constitutionality. Instead, what the Government should focus on is collecting the proper taxes for surplus imports, and imposing a very, very stringent road-worthiness inspection on secondhand imports. if they don't meet road-worthiness requirements for the Philippines, the government confiscates them and sells them for scrap.

Taxes won't help local assemblers... they'll just help the local multinationals gain a small percentage of market share. What will help local small-scale assemblers is government support and standardization of local, indigenous designs like the Jeepney, the tricycle and the XLT. With manufacturing standards comes common chassis parts, which opens up opportunities for local factories to mass-produce parts such as bumpers, doors, roofs, etcetera... bringing assembly costs down... in fact, coordination might even make it possible for us to locally assemble a line of engines... say, a common 2.5 liter diesel for Jeepneys, XLTs and light trucks and a common 1 liter or smaller engine for whatever will replace tricycles in the city.

[actor21]

mas madali mag import ng buo kesa mag assemble

mas cost effective

you need to employ more people for assembling

more people = more chances of KMU infiltration = welga

Car companies here already got burned by that before

yan nang masakit na katotohonan dito sa bansa natin, welga dito welga doon....
pero baket halos pareho lang ang price ng CBU vs sa locally assembled?

[jpdm]

The government should amend the law government Freeports in order to strengthen the E.O. banning the sale of imported CBU outside these areas....

Th government can find alot of ways to discourage the proliferation of CBUs in the Philippines...

I say tax to death all imported CBUs with no local value added.

We can be another Thailand in auto manufacturing if we do the right
thing.

This time, I agree with Ford Motor Philippines that Ford/Mazda Philippines, Toyota, Mitsubishi, Isuzu and UMC should be supported by the government especially if their operation will focus more on the CKD assembly...

Local native assemblers also should be given incentives...

As an advocate of local auto industry development, I believe the government should encourage local assemblers here to revive the idea of joining forces and produce certain local auto components for the local industry (I remember the proposal develop a common engine or a 70 percent local component AUV i.e. Toyota Tamaraw FX is almost 65% local) ...

Sana, 2010 na para wala na ang walng dereksyong administrasyon ni PGMA...

Puro pasakit sa local and even foreign businessmen...

Heyday ng importers ang PGMA administation...

And I join Ford and Toyota with their grief that this government is nothing more but a loose cannon.

[niky]

We can tax them... but not really "tax them to death". The reason for low prices for some CBU vehicles here is because the government lowered the tax on non-luxury vehicles here, to make economy vehicles more affordable to the public.

Besides... high taxes will not really spur productivity that much... what we need is local vehicles that are affordable. Malaysia went that way, and it worked only because they had a large enough market to support a local manufacturer. Our local market can't support the manufacture of anything but commercial vehicles. And tax protectionism is a double-edged sword... Proton was okay initially... but the lack of competition and incentive meant that they had locally-made components that really weren't world class in quality... which made them uncompetitive outside of the Malaysian market.

Would you make it so that Filipino buyers could only buy Chinese-quality (or worse) vehicles? Would we support the local auto-industry this way at the expense of commercial users, businesses and entrepreneurs who are denied the availability of reliable and safe working machinery?

Instead of concentrating on "taxing" CBUs "to death"... I would restructure the tax and use the earnings from the tax to subsidize local manufacture... to pay for local development of powertrains and suspensions (the biggest hurdle in local manufacturing) to make locally assembled vehicles better and more competitive products.

Remember, we should not only support our local industry, but we should also assure that our local consumer base is well-served by that industry. It's only by pushing local industry to create a product that local (and hopefully overseas) consumers will be happy to buy that we can ensure that everyone wins.

[True Faith]

yan nang masakit na katotohonan dito sa bansa natin, welga dito welga doon....
pero baket halos pareho lang ang price ng CBU vs sa locally assembled?

The tariff rates on CBU and CKD has become almost the same. Japan is also using low cost Thailand and Indonesia to bring CBUs to the Philippines...

So the idea is to put not tariff barriers (tax incentives for instance) in favor of CKD or even full manufacturing of local vehicles in the Philippines...

AUVs were so popular before that small Pinoy assemblers joined the fray because tax on AUV is very favorable to the type of vehicle..


We have to remember, Pinoys love to buy multi-purpose vehicles..

The short-lived popularity and huge success of those flying coffins from SUVic and oher ports attest to the popularity of multi-purpose vehicles...

So for me, tax to death all CBUs and support CKD operations of local assemblers..

Nissan (UMC: Urban), Mitsubishi (Adventure, L300 Versa Van), Toyota (FX, REvo, Innova), Isuzu (Crosswind) are very popular locally asssembled vehicles..

I suggest Ford bring back it Ford Fiera to reach out to many Pinoys..

[jpdm]

The government should lead the way in helping our local auto industry.

[myk384]

Agree!!!

Give tax incentives to locally assembled vehicles... because of this, expect low prices of cars (nice if BMW's and Benzes are locally assembled)

Give high taxes to imported vehicles....

[myk384]

I think, more cars can be assembled here, (if local assembled, cheaper prices, good economy, more jobs!!)

Flashback to the 90's, LIST OF LOCALLY ASSEMBLED VEHICLES PLUS THEIR ASSEMBLY PLANTS(trucks not listed, please correct me if im wrong or any additions):
BMW - 3 Series, 5 series (Paranaque City)
Daewoo - Cielo, Espero, Racer, Prince??
Daihatsu - Feroza, Hijet, Charade (Paranaque City)
Ford - Lynx, Ranger (Santa Rosa Laguna)
Fiat - Uno (Las Pinas City)
Honda - City, Civic, Accord, CR-V (Santa Rosa Laguna)
Hyundai - Excel, Elantra, H100/Grace, Sonata?? (Las Pinas Laguna)
Isuzu - Hilander, Pickup/Fuego, Trooper?? (Laguna)
Kia - Pride, Pregio, Besta, Sportage (Paranaque City)
Mazda - 323, 626, Familia, Astina, Lantis, MPV, MX5 (Paranaque City) B Pickup, E Van (Las Pinas City)
Mercedes Benz - MB100, Musso, C class, E Class (Pasig City)
Mitsubishi - Lancer, Spacewagon, Galant, Adventure, L300, Pajero, Spacegear, L200 (Cainta Rizal)
Nissan - Sentra, Cefiro, Altima, Maxima, Bluebird, Vanette, Patrol, Urvan, Eagle/Frontier, Terrano (Laguna)
Proton - Wira (Alaminos Pangasinan)
Subaru - Legacy (Paranaque City)
Suzuki - Vitara, Samurai, Esteem (Pasig City)
Toyota - Corolla, Corona, Tamaraw FX, Revo, Liteace (Bicutan then Laguna)
Volkswagen - Polo Classic (Alaminos?)
Volvo - 850, 960 (Laguna)

These vehicles can be assembled locally (in my opinion and apart from the already locally assembled):
BMW - 3 Series, 1 Series, 5 Series, X3
Chana - all of its lineup
Chery - QQ, Tiggo, Cowin
Chevrolet - Aveo, Cruze, Spark, Captiva
Chrysler/Mercedes Benz - 300C, C Class, E Class
Ford - Fiesta, Ranger, Everest
Honda - CR-V, Accord, Jazz
Hyundai - i10, Getz, Accent, Sonata, Starex, Santa Fe, Tucson (can alleviate waiting list problem)
Isuzu - Alterra
Kia - Picanto, Rio, Soul, Sportage, Sorento, Carens
Mazda - CX-7, 6, 2
Mitsubishi - ASX, Fuzion, Galant, Montero Sport, Strada
Nissan - Teana, Navara
Subaru - Impreza (maski yung mga low end variants lang), Legacy, Forester
Suzuki - Alto, Celerio, APV, Swift
Toyota - Altis, Yaris, Camry, Avanza, Fortuner, Hiace, Hilux
Volvo - C30, S40, XC60

Agree with the list???

[ghosthunter]

No i don't agree. The reasons have been mentioned time and again in other discussion threads.

Among other reasons:
-small local market for vehicles to sustain local assembly/manufacturing operations.
-Overhead costs is expensive like electricity, labor.
-national and local government red-tape
-lack of support infrastructure

[jpdm]

[SIZE=4]Isuzu Phils. offers i-Van option for businesses
[/SIZE]


Isuzu Phils. offers i-Van option for businesses | BusinessWorld Online Edition


BIDDING TO serve businesses looking for a versatile service-oriented vehicle, Isuzu Philippines Corp. (IPC) last week launched the i-Van variant of its best-selling NHR light duty truck.
THE Isuzu i-Van.
Made in partnership with Centro Manufacturing Corp., which manufactures the vehicle’s body, the i-Van offers the businessman the capability to seat 12 to 18 full-sized adults or carry cargo of up to 1.5 tons.

Isuzu’s 2.8-liter 4JB1-TC with intercooler diesel engine, capable of delivering 91 PS of power and 20 kg-m of torque and mated to a five-speed manual transmission, powers the i-Van. The NHR, Isuzu claims, has managed to deliver fuel consumption of 12.965 kilometers per liter under normal driving conditions.

Passengers can expect individual fabric-covered seats with assist grips and pockets, a factory-installed air-conditioning system that extends up to the rear, a four-speaker AM/FM stereo system with an in-dash CD player and even fully covered floors.

The i-VAN maintains the same NHR gross vehicle weight of 3.8 tons. Its overall length of 5,025 mm and overall height of 2,092 mm keeps it class 1 on major tollways.

The body options include passenger van, cargo van, school bus and even an ambulance.

“The local landscape is indeed changing and as transport needs become more demanding, we want to be the companion that working motorists can rely on,” IPC President Ryoji Yamazaki said during the launch.

“The Isuzu NHR with i-VAN body option is our answer to the growing requirements of Filipinos when it comes to people and cargo transport,” he added.

Ito gawa sa Cavite ng Centro manufacturing, Inc.

[jpdm]

Toyota to hike local content of its cars




By Ma. Elisa P. Osorio
(The Philippine Star)
Updated January 11, 2012



MANILA, Philippines - Toyota Motor Philippines Corp. (TMPC) plans to increase the domestic content of locally-assembled automotive vehicles.

TMPC president Michinobu Sugata said they are planning to increase the local content of their vehicles.

“We will increase to at least 40 percent, otherwise we cannot be competitive,” Sugata said.

The current domestic content of locally-assembled vehicles, he said, is 20 to 25 percent.

Sugata said they will invite more Japan-based suppliers to locate in the Philippines. This will hopefully revitalize the local auto parts industry.

The Philippine government is trying to encourage auto parts makers to increase their production.

Sugata said this is a good time for the Philippines to encourage Japanese auto parts makers to locate in the Philippines with the current exchange rate making the Philippines a viable investment destination.

Sugata said the appreciation of the yen against the peso, coupled with the calamity in Japan boosts the chance of the Philippines to attract more auto parts makers.



“To grow the manufacturing business, the most important is the parts. We need parts suppliers more and the Philippines has a very good chance of attracting them,” Sugata said.

Meanwhile, Ford Philippines yesterday announced that December 2011 was the best month for the firm after sales went up 24 percent to 973 units.

The December 2011 figures helped drive Ford’s full-year sales in the Philippines up 48 percent to an all-time high of 9,778 units, making Ford the fastest growing auto brand in the country for 2011.

Sales were boosted by the All-New Ford Fiesta, which delivered December 2011 sales of 291 units and finished its first full-year of availability in 2011 with overall retail sales that reached 3,401 units.

“The All New Ford Fiesta has reshaped what class-leading means in the small car segment, and customers clearly appreciate the incredible value this car represents and delivers,” said Randy Krieger, president, Ford Group Philippines.


source:http://www.google.com.ph/url?sa=t&rc...TukLSTOpKZz0Fw

[Balikpinoy]

Pipedream! The sales volume in the Philippines is miniscule compared to other markets. You want local industries to thrive? Start with trying to get the Nancy Binay voters above poverty level and into the middle class.

[jpdm]

Smuggling threatens PH auto industry roadmap

MANILA — The country’s expanding middle-income population and billion dollars of annual remittances from overseas Filipino workers boost potential of our auto industry.

At the same time, industry experts indicate that the third wave of motorization in the region is expected to take place between 2015 and 2022.
All such potential will be difficult to realize if smuggling and issues of importing second-hand vehicles are not resolved swiftly.

A recent study by Philippine Institute for Development Studies Senior Research Fellow Rafaelita Aldaba reveals smuggling and importation of used vehicles impede growth of the country’s auto industry.

Murky policy environment, discrepancy of statistics on registered motor vehicles and revenue losses in the industry are also discussed in the study which reflects government’s lackluster effort to curb car smuggling.

Aldaba noted traders use free ports and other special economic zones to bring in used cars to avoid paying the correct duties and taxes.
Smuggled vehicles are priced 30 to 50 percent lower than their new counterparts and present stiff competition to the domestic auto industry.

The study showed significant data gap in number of registered vehicles and auto sales between LTO and Chamber of Automotive Manufacturers of the Philippines (CAMPI).

In 2009, for example, LTO’s new registered motor vehicles totaled 182,589 while CAMPI’s record of domestic sales showed a total of only 132,444 motor vehicles or a gap of 27 percent.

source: Smuggling threatens PH auto industry roadmap - ZamboTimes

[niky]

Old news. And outdated. The "smuggling" was legitimate importation allowed by the non-closure of the TRO filed against EO 156, which banned importation of surplus vehicles. Proof of this is the huge fees collected by the Bureau of Customs in CEZA from the importers.

And if they bothered to track data to the latest year we have full data for, which is 2011, they'll note the discrepancy has gone down from 50k plus vehicles to 30k.

The low price of brand new vehicles and the maturing market is killing Freeport imports. Or was, until the SC's ruling earlier this year banned them completely. Sellers of local secondhands are complaining how tight the market is now due to the plethora of cheap brand new cars, low-down schemes and low-interest bank loans.

-

The government could allow surplus cars without hurting the local industry. How? Simple. Base taxes on the vehicle's brand-new extrapolated value instead of their current book value. That way the price difference to local secondhands disappears completely.

Of course, that makes too much sense, so it was never really going to happen.

[jpdm]

Toyota bags tax perks for P2-billion assembly of new Vios, jacks up production target



By: Ben Arnold O. De Vera, InterAksyon.com
July 8, 2013 4:19 PM

Photo by Ben Arnold O. De Vera

MANILA - The Philippine unit of Japanese carmaker Toyota is jacking up its output by almost a fifth after it spent P2 billion for the local assembly of the third-generation Vios.

At today’s ceremonial roll-off of the all-new, third-generation Vios, Toyota Motor Philippines Corp (TMPC) president Michinobu Sugata said production this year will hit 36,300 units, up 19 percent from 30,500 last year.

The investment for the new-generation Vios secured tax and other incentives from the Board of Investments (BOI) as a pioneer project under the 2011 Investment Priorities Plan (IPP).

TMPC plans to assemble 14,594 units of the all-new Vios until yearend. Production of the new model began last June 26.

“With production of the new Vios, we will make the auto industry fired up on all cylinders,” Sugata said.

He said the Vios is the top-selling vehicle in the country with 16,517 units sold last year or almost a tenth of the industry sales of over 182,000.

TMPC vice president Roque Rommel T. Gutierrez told reporters that sales of the all-new Vios are expected to jump to 2,000 a month from the previous variant’s monthly sales of 1,400. The new Vios is now available at Toyota dealerships nationwide, he said.

The third-generation Vios, however, will be more expensive with a starting price of P723,000 per unit or about P20,000 more than that of second-generation units.

The Philippines is the second Asean country to assemble the all-new Vios after Thailand—Toyota’s production base in Southeast Asia. Vios production in the Philippines started in 2004.

Double local content next year

The biggest assembler as well as seller of vehicles in the country, TMPC also plans to double the local content of the Vios model to 40 percent by next year.

TMPC sourced 265 parts and components or about a fifth of those used to assemble the all-new Vios from local vehicle parts makers belonging to the Toyota Suppliers Club. The previous Vios variant had only 230 locally sourced parts.

Sugata said the company plans to further increase the number of locally sourced parts to over 300. For one, the underutilized press plant will be used to localize the stamping or shaping of 15 parts such as door, floor and roof, among others, by July next year, he said.

Gutierrez said they are also looking at sourcing bulky parts from domestic manufacturers. Sourcing more parts from local makers will slash logistics and importation costs, he said.

source: Toyota bags tax perks for P2-billion assembly of new Vios, jacks up production target - InterAksyon.com

[jpdm]

Sweeet!

Mitsubishi Motors to build 2nd plant in PH - report



ABS-CBNnews.com
Posted at 08/23/2013 9:20 AM | Updated as of 08/23/2013 9:20 AM

MANILA, Philippines - Mitsubishi Motors is planning to build a second automobile plant in the Philippines by 2015, according to a report by Nikkei.

Nikkei reported the plant is estimated to cost around 20 billion Japanese yen (roughly $202 million or P8.93 billion).

The new plant will churn out an annual 100,000 subcompacts, SUVs and other models by 2017.

Mitsubishi Motors Philippines currently has a plant in Cainta, which started operations in 1964. The plant currently has a production capacity of 15,000 units per year on one shift.

source: Mitsubishi Motors to build 2nd plant in PH - report | ABS-CBN News