Local autoparts makers upbeat over proposed project

Local autoparts makers are still optimistic that their proposed Philippine Utility Vehicle (PhUV) project will help the ailing Philippine auto industry break the 100,000-unit sales barrier next year.

Industry sales volume from January to September this year hardly grew with only a 0.2 percent increase compared to last year.

Total industry sales volume for the nine-month period was only 72,085 units compared to last year’s 71,936 units.

At a monthly average production of only about 8,010 units, this may not be enough to surpass last year’s annual sales of 97,063 units, much less hurdle the 100,000 units target for this year, a mark that assemblers said would be an indication of continued growth.

Industry sales would have to be around 9,300 units per month in the fourth quarter to do this.

Local autoparts makers are therefore hoping that the PhUV, a low-cost brand new utility vehicle with the price of a second-hand car but with a high level of value added local parts, would spur sales by some 30,000 units more.

The target market would be those left unserved following the recent Supreme Court decision banning the importation of used vehicles.

There are also fears that there will be a decrease of cars produced from completely knocked-down (CKD) kits from the current 52 percent to about 46 percent next year.

Only CKD-manufactured cars have value added or locally-produced parts in them.

The remaining 54 percent will be imported in completely built-up (CBU) form, with no value added local parts in them.

The Board of Investments (BOI) has formed a tripartite Technical Working Group (TWG) made up of representatives of the BOI, assemblers and autoparts makers to study the different aspects of the PhUV program.

These teams are currently looking at the capability of local parts and components manufacturers, the value added local parts that can be put into the PhUV, the potential investments for participants and the incentives that could be given to assemblers, autoparts makers and buyers in exchange for the said investment and participation.

Local autoparts makers are optimistic that with the support of the assemblers and the government, the PhUV project would finally take off to alleviate the plight of some 28,000 workers dependent on them.

They are pushing for the government to grant incentives to PhUV project participants similar to those granted by its Asean neighbors to their auto industry.

Such incentives should be given not only to the assemblers but also to the autoparts makers and the car buyers as well.