Mod­ern­ized PUV maker may win CARS in­cen­tives

Business World - - THE ECONOMY - Anna Gabriela A. Mogato

AU­TOMAK­ERS show­cased their pro­posed re­place­ments for the jeep­ney as the govern­ment, gear­ing up for a public util­ity ve­hi­cle (PUV) mod­ern­iza­tion pro­gram, said it may of­fer the third slot in an au­to­mo­tive man­u­fac­tur­ing in­cen­tives pro­gram to a PUV man­u­fac­turer.

Trade Sec­re­tary Ra­mon M. Lopez told re­porters dur­ing the launch of the first Philip­pine Auto Parts Expo ( PhilAPEX) that the De­part­ment of Trade and In­dus­try’s (DTI) Com­pre­hen­sive Au­to­mo­tive Resurgence Strat­egy pro­gram (CARS) may take in as an ef­fec­tive third par­tic­i­pant the maker of a mod­ern­ized PUV.

The first two slots in the CARS pro­gram, which is de­signed to en­cour­age lo­cal man­u­fac­tur­ing of cars, have been awarded to Mit­subishi Mo­tors Philip­pines Corp. and Toy­ota Mo­tors Philip­pines Corp.

The CARS pro­gram grants P27 bil­lion worth of in­cen­tives to three auto com­pa­nies to boost do­mes­tic ve­hi­cle pro­duc­tion to 700,000 units by 2022 and steer the in­dus­try away from im­port­ing Com­pletely Built Up units in fa­vor of Com­pletely Knocked Down units which are as­sem­bled lo­cally, pro­vid­ing jobs and in­come for work­ers.

“Mit­subishi and Toy­ota — with their re­spec­tive par­tic­i­pat­ing parts mak­ers — have put in over P11.2 bil­lion in new assem­bly fa­cil­i­ties, manda­tory body shell and large plas­tic parts (mak­ing fa­cil­i­ties)… Of this amount, P9.1 bil­lion is el­i­gi­ble for fixed in­vest­ment sup­port, sub­ject to au­dit.” Mr. Lopez said in his open­ing re­marks.

With the third slot re­main­ing un­filled, Mr. Lopez said a maker of mod­ern­ized PUVs may end up cap­tur­ing the in­cen­tives bud­geted for the third par­tic­i­pant.

“To fur­ther push the au­to­mo­tive in­dus­try’s resurgence, DTI has de­cided to shift the un­sub­scribed third slot bud­get un­der the pro­gram to sup­port the lo­cal man­u­fac­tur­ing of re­place­ment ve­hi­cles for DoTr’s (De­part­ment of Trans­porta­tion’s) Public Util­ity Ve­hi­cle Mod­ern­iza­tion Pro­gram,” he said.

“This is be­cause the mar­ket vol­ume re­quire­ment of over 200,000 re­place­ment PUV units presents an op­por­tu­nity to jump­start the devel­op­ment of the coun­try’s com­mer­cial ve­hi­cle sec­tor.”

“In the wake of this de­ci­sion, the pro­posed eco-PUV pro­gram will fea­ture some 15 pro­to­types de­vel­oped by po­ten­tial par­tic­i­pants that ad­here to Philip­pine Na­tional Stan­dards.”

Hino Mo­tors Philip­pines Corp. Chair­man Vi­cente T. Mills, Jr. said that the DoTr has asked the com­pany to pro­duce by De­cem­ber 150 units of its mod­ern PUV pro­to­type, the N04C, which is com­pli­ant with the Euro 4 emis­sion stan­dard (model N04C). How­ever, Mr. Mills added that the com­pany has only com­mit­ted to 20-30 units.

The De­part­ment of Trans­porta­tion’s PUV Mod­ern­iza­tion Pro­gram is seek­ing to phase out tra­di­tional jeep­neys in fa­vor of more eco-friendly al­ter­na­tives fea­tur­ing global po­si­tion­ing sys­tems, closed- cir­cuit tele­vi­sion sys­tems to mon­i­tor pas­sen­gers and the driver, and speed lim­iters.

Hino Mo­tors has its own plant in La­guna. Its pro­to­types are ex­pected to cost P1.4 mil­lion-P1.6 mil­lion.

Once im­ple­mented, PUV op­er­a­tors will have to re- fleet with mod­ern­ized units to re­new their fran­chise.

Mr. Lopez told re­porters that op­po­si­tion from op­er­a­tors and the PUV sec­tor is ex­pected at first, due to fi­nan­cial con­cerns.

“Right now, the jeep­neys are prob­a­bly owned by the op­er­a­tors or by the driv­ers them­selves. Ob­vi­ously, there will be fi­nan­cial sup­port be­cause we know their lim­i­ta­tions oth­er­wise the pro­gram will not be suc­cess­ful,” he added.

The govern­ment has said it will sup­port re-fleet­ing via the Devel­op­ment Bank of the Philip­pines, with fi­nanc­ing schemes that will fea­ture a 5% down pay­ment and a 6% in­ter­est rate, payable within seven years.

“This is a work in progress and a lot of govern­ment fi­nan­cial in­sti­tu­tions are will­ing to help. There are schemes that will make the trans­for­ma­tion lighter, ob­vi­ously to make it more ac­cept­able but it is the driv­ers them­selves, the rid­ing party will en­joy the com­fort of com­mut­ing.”

PhilAPEX, a joint pro­ject of the Board of In­vest­ments and the Philip­pine Parts Mak­ers As­so­ci­a­tion, Inc., show­cased lo­cal man­u­fac­tur­ers of car parts and about 16 pro­to­types of mod­ern­ized PUVs from var­i­ous auto com­pa­nies. —

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