Local parts makers impatient over delayed auto industry roadmap

It has been two years in the making and yet, there is still no end in sight for the much-awaited local auto industry roadmap as proposed by the Board of Investments (BOI). Motor Vehicle Parts Manufacturers Association of the Philippines (MVPMAP) President Ferdinand Raquelsantos said that numerous well-studied drafts have been crafted, submitted to and refined by the Philippine Institute for Development Studies (PIDS) and the BOI during the last two years. "And yet, the BOI’s target release of the roadmap on the first quarter of 2014 has come and gone. The industry is now growing impatient”. He explained that despite the fact that the auto industry as a whole is now experiencing increases in sales, some major investments have been put on hold pending the issuance of the roadmap. As it is, the current growth forecast for manpower is for it to increase by 10% come 2016. "Investors want to see first what is in store for them in terms of fiscal and non-fiscal incentives before they pour in additional investments. The continued delay will not be good for us. We might lose this opportunity again and miss the boat again,” he said. The same sentiment was evident during the recent Electric Vehicle Summit. Foreign investors and their local EV partners were tentative in their decisions to invest in manufacturing facilities for electric vehicles in the country. "Just like them, we also want car assemblers to locally assemble more of their products here rather than bring them in in completely built up (CBU) form. There are no value-added contents in terms of labor and materials in CBU importation. But no investment decisions are being made right now until the car assemblers and other potential foreign investors have seen the roadmap and determined the economic feasibility of local car assembly”, Raquelsantos said. Fourteen years ago, he said, the government imposed an increased excise tax on the Asian Utility Vehicle (AUV). This derailed the booming local AUV assembly and it never recovered. "Our Asean neighbors grabbed this market segment from us and took the lead in producing these vehicles. They became the regional manufacturing hubs for these vehicles. Now, our production output is but a fraction of theirs”. He also cited another example. "The closure of the Ford assembly plant in Sta. Rosa and its subsequent relocation to Thailand was a big loss to local parts makers. We completely lost the Ford business to Thailand. We hate to see another car assembler leave or partially relocate some of his CKD assembly somewhere else. We hope we have learned our lessons from this bitter experience and learned them well,” he said. (Bernie Cahiles-Magkilat)