BOI okays Ford request under Asean scheme

The Board of Investments (BOI) has approved the request of Ford Motor Company Philippines Inc. (FMPI) for the inclusion of completely built-up (CBU) vehicles and automotive parts and components from Thailand under the ASEAN Industrial Cooperation (AICO) scheme.

Based on documents submitted to the BOI, Ford’s proposed AICO arrangement would cover the exchange of locally produced built-up (BU) Ford and Mazda vehicles, namely the C206 Laser, J39 Protégé car, U204 Escape and J14 Tribute sports utility vehicle from Ford Motors Phils. Inc. and built-up J97 Ranger pick-up truck and parts and components for U204 Ford, J14 Mazda, C206 Ford and J39 Mazda from Auto Alliance Thailand.

The estimated total trade value would amount to $551 million during the five-year implementation.

More than $270 million worth of nominated built-up vehicle and parts and components would be imported during the five-year period by the FMPI from AAT, while FMPI export of built-up vehicles to AAT for the same period is estimated at 279 million.

For the first year, total Philippine import and export is pegged at $39 million and $41 million, respectively.

According to Ford, the AICO arrangement would result in efficient operations within ASEAN and would promote support to the regional and global manufacturing needs for similar programs.

Likewise, the AICO scheme would create volume efficiencies for ASEAN companies to be competitive with non-ASEAN imports. It would also enhance exports and create more jobs.

Ford further pointed out that the Philippines and Thailand would have an opportunity to gain experience in controlled built-up trade and position themselves ahead of full ASEAN Free Trade Agreement (AFTA) trade.

As the AICO scheme would improve operational efficiency, Ford said, it would also increase the participating companies’ competitive cost and quality.

The AICO scheme would also benefit parts and components suppliers by strengthening the local industry and eliminating the need for dual tooling and overlapping facility investments. It would also increase the competitiveness position of the suppliers due to technology transfer and economies of scale.

The BOI, in approving Ford’s application, commented that an AICO application involving CBU is "critical to the future success of AFTA implementation and can serve as a catalyst for industries in each economy to support the full implementation of AFTA on schedule.