DTI endorses Ford bid for importation of 2,000 SKD packs

Trade and Industry Secretary Manuel Roxas II will favorably endorse the request of Ford Motors Philippines to Import 2,000 semi-knocked down (SKD) units of the sports utility vehicle (SUV) Ford Escape.

Roxas said he is "favorably dispensed" to endorse Ford’s SKD request if asked by Malacañang.

Ford must seek Malacañang approval to import the SKDs since under the Motor Vehicle Development Program (MVDP), participants are no longer allowed to import SKDs. However, on a case-to-case appeal. Malacañang can allow such SKD importation.

Roxas said his decision to favorably endorse Ford’s SKD request is based on the fact that Ford has put up assembly facilities, has generated employment for Filipinos, has exported part of its production and has encouraged suppliers to locate in the Philippines.

Roxas was initially non-committal about Ford’s request as he had wanted to finally put an end to SKD imports and allow MVDP participants to compete on a level playing field.

The SKD importations were initially allowed under the MVDP when the program was just starting.

However, under the MVDP, participants would eventually have to shift to the assembly of completely knocked down (CKD) units and put up assembly facilities.

The SKD import privilege was removed in 1997.

Recently, Malacañang granted the Norkis Group/ Daimler-Chrysler the authority to import SKDs anew supposedly to be able to test the best model which the group could eventually assemble locally.

Another car manufacturer, Auto Prominence Corp., also filed its own request to import SKD packs of a Volkswagen model.

However, the government noted that Auto Prominence, government has only been importing SKDs and has not made substantial investments in putting up assembly facilities for CKDs.

SKDs are almost complete vehicles, lacking only tires and batteries. They are slapped a mere tariff of three percent. CKDs also carry the same tariff rate, while completely built up (CBU) units are slapped a 30-percent tariff rate.

MVDP participants are complaining about the continued grant of SKD import privileges and the Board of Investments is set to decide on the issue once and for all.