MANILA, Philippines — The two companies participating in the Comprehensive Automotive Resurgence Strategy (CARS) have already produced over 200,000 units under the program, according to an official of the Department of Trade and Industry (DTI).
In a media briefing yesterday, Trade Undersecretary and Board of Investments (BOI) managing head Ceferino Rodolfo said the combined production of enrolled vehicles of Mitsubishi Motors Philippines Corp. (MMPC) and Toyota Motor Philippines Corp. (TMP) under the program currently stands at 207,165 units.
Of the total, TMP, which started production in July 2018, accounted for 134,242 units of its Vios.
In contrast, MMPC, which started production in February 2018, produced a total of 72,923 units of its Mirage model.
Under the CARS program, participants need to manufacture at least 200,000 units of their enrolled vehicle model within six years in order to avail of incentives from the government.
The CARS program aims to attract new investments and develop the country as a regional automotive manufacturing hub.
Under Executive Order 182 issued by then president Benigno Simeon Aquino III for the CARS program, the government offers fiscal support to participants in exchange for investments for the production of at least 200,000 units of their enrolled vehicle model within six years.
An enrolled model is qualified for fiscal support amounting to P9 billion.
Apart from the produced units, Rodoldo shared that other achievements of the program include improved localization or the share of parts sourced locally , which is now above 40 percent for both enrolled units.
Rodolfo shared that when the program started, MMPC’s localization of the Mirage was at 22 percent, while Vios was at 32 percent.
As a result of the program, Rodolfo shared that the country has been able to save $1.01 billion in forex exchange.
In addition, the program also created nearly 110,000 direct and ancillary jobs.
“We are working with the FIRB (Fiscal Incentives Review Board) for the extension of the CARS program,”Rodolfo said.
Last month, the DTI said it was still in discussion with participants on the extension of the program.
TMP has been pushing for an extension of the six-year compliance period for the CARS program as early as 2020, based on previous news reports.
Gutierrez earlier cited the higher excise tax slapped on cars under the government’s tax reform package, which took effect in 2018, the Taal Volcano’s eruption in 2020, and the COVID-19 pandemic, as among the factors that have brought challenges to the automotive industry and affected vehicle demand and sales.
“The DTI fully understands the impact of the pandemic on all industries, including particularly the automotive industry. The demand was really hit, together with the supply chains. Second, we also recognize that the CARS program participants have already complied with their investment commitments. It’s just really a question of not being able to hit their volume commitments due to the market downturn,”Rodolfo said earlier.