Purisima bucks importation of used vehicles

Trade and Industry Secretary Cesar Purisima said yesterday the continued inability of the government to stop the influx of imported used cars is preventing the local automobile industry as well as the auto parts industry from growing.

"If we are to develop an auto parts industry in the country, we must also have a car assembly," Purisima said, adding that "if you look at the size of our market, we are the smallest of the five ASEAN members, Thailand has sold 500,000 units, Indonesia has 300,000 units and the Philippines has only 91,000 units sold in 2003."

Purisima pointed out that under the Motor Vehicle Development Program, the government decreed a stop to used car importation.

However, used car importers in Subic were able to get a Temporary Restraining Order (TRO) and used cars continue to enter the market.

"The continued entry of used cars would not be good for the development of our car industry," Purisima said.

At the same time, the new DTI head said, "if we are going to encourage the car parts industry, it must help the DTI to come up with a roadmap on how we can have a sustainable industry in the country."

The DTI, he reiterated, needs time to study a development program for the auto parts industry.

Purisima had earlier noted that the auto parts industry is dominated by multinational companies and is already a very competitive sector.

In developing a possible incentives program, the new DTI head said, he would like to study the incentives that are being given by such countries as Vietnam and Thailand which are the Philippines’ major competitor in the automotive industry.

Local auto parts makers are asking the Arroyo Government to extend an incentives program to their sector similar to the program granted to local automotive assemblers.

The Automotive Export Program grants tax credits to local assemblers provided they reach a minimum export level.

At present, however, only Ford Motor Company Philippines is already exporting completely built-up units and can avail of the AEP.

Local auto parts makers, however, argue that they have made a substantial contribution to the export sector and thus, deserve similar incentives.