Partsmakers fret over BOI’s slow action on automotive roadmap

The Motor Vehicle Parts Manufacturers Association of the Philippines (MVPMAP) said investments in the automotive industry are being held back by the Department of Trade and Industry’s slow action on the automotive industry roadmap. 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 Board of Investments in 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,” Raquelsantos said. Raquelsatos said 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.” He said the current growth forecast for manpower is for it to increase by 10 percent 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,” Raquelsantos said. 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. Raquelsantos cited a missed opportunity in the Asian utility vehicle (AUV) when 14 years ago, the government imposed an increased excise tax on the model He said 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 the closure of the Ford assembly plant in Sta. Rosa and its subsequent relocation to Thailand as another example of "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.”//