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?