HARI commits additional P2 B for Laguna plant

MANILA, Philippines — The exclusive distributor of Hyundai vehicles intends to invest an additional P2 billion over the next two years in its Laguna assembly plant.

Officers of Hyundai Asia Resources (HARI) told congressmen that its additional investment would significantly improve its production line and pave the way for the assembly of more Hyundai car models.

“Once completed, HARI’s new and improved assembly facilities would be capable of producing 30,000 cars annually. The plant would also employ more workers, given its labor-intensive processes,” HARI executive vice president Ladislao Avila said.

Avila said the company’s additional P2-billion investment commitment and plant upgrading are in line with a Board of Investments (BOI) ruling giving the firm six months to add more welding and painting to its current assembly processes.

Last November, the BOI downgraded its cancellation of HARI’s local assembly license to a six-month suspension from the government’s Motor Vehicle Development Program (MVDP) to give the company time to incorporate more welding and painting processes in its assembly plant. 

The ruling came after HARI sought reconsideration of the BOI’s cancellation order.

The BOI also passed on to the Bureau of Customs (BOC) the task of verifying and computing whether HARI owes any duty differential from its importations of Eon and Hyundai 350 van parts and components for assembly in the Philippines.

BOC representatives maintain that because of HARI’s “Green Lane”status, the agency relied mainly on the company’s import documents and the authority to import. 

No inspections were needed like all other “Green Lane” importers, Batangas port customs collector Reynaldo Galeno said. 

But on two occasions that HARI’s shipments were tagged “Random Red,” physical and x-ray examinations showed parts and not completely built up (CBU) units, he said.

BOI governor Henry Co said the BOI would review the provisions of the MVDP and come up with clear-cut rules and regulations to avoid conflicting interpretations. 

While Co maintained that most auto manufacturers understand the main differences between a CBU, a completely knocked down (CKD) and knocked down (KD) units, committee members insisted on having specific guidelines to guide assemblers and BOC examiners.

The House ways and means committee is conducting an inquiry on HARI’s alleged violation of its MVDP registration.