DTI crafting new motor vehicle dev't program

MANILA, Philippines - The government is crafting a Motor Vehicle Development Plan (MVDP) that will be innovative and attractive enough to encourage local auto manufacturing firms to export their vehicles.

The MVDP will list incentives and perks that auto manufacturers will enjoy. It is expected to revitalize the manufacturing industry.

In an interview, Trade Undersecretary Cristino L. Panlilio said they would like local automotive manufacturers to not only serve the domestic market, but also sell their vehicles overseas.

However, Panlilio said, the Department of Trade and Industry concedes that they cannot have exports unless domestic consumption goes up.

A strong domestic market would make production more efficient.

Panlilio said the solution to increase the domestic market is to improve the economy so that the purchasing power of people goes up.

Majority of the players in the auto industry feel that the Philippines will be a 300,000 vehicle market by 2015, according to a study of the University of Asia and the Pacific (UA&P) on the auto industry.

The same view was shared by Trade and Industry Secretary Gregory L. Domingo who projects that the 300,000 mark may be hit by 2016 especially since the per capita income of Filipinos is growing.

“Reaching a 300,000 unit market demand by 2016 is very possible,” Domingo said, noting that the per capita income has reached over $2,000.

“Sales of cars have been proven to shoot up if per capita income exceeds $2,500,” he said.

According to the UA&P study, the size of the country’s population, plus rising per capita income can further stimulate vehicle ownership.

Likewise, the study noted that the other positive signs that can push vehicle sales are the steady inflow of OFW remittances and rising agricultural incomes which boost purchasing capacity.

In addition, the study noted attractive financing terms have led to higher automotive purchases, especially by entry level buyers for their business or personal use.

The country’s archipelagic make-up and improved infrastructure can also be a source of growth for vehicle ownership.

“Given the aforementioned growth factors, an increase in the size of Philippine automotive manufacturing can be expected. In fact, a shared view among parts and components makers and most of the automotive manufacturers is a 300,000 vehicle market by year 2015,” the study noted.

The study has reiterated the importance of incentives to make manufacturers more economically competitive.