DTI: CARS participants will meet production deadline

The Department of Trade and Industry (DTI) expressed optimism that participants of the Comprehensive Automotive Resurgence Strategy (CARS) program will be able to hold up their end of the bargain with the eyed 3-year extension for production.

Trade Undersecretary Ceferino Rodolfo told the reporters in a recent interview that car manufacturers under the CARS program will be able to produce at least 200,000 units with another 3 years added to their production time.

Rodolfo earlier said an executive order (EO) covering such relief is targeted to be released by June. The 3-year extension proposal was a request

previously lodged by the CARS participant as they struggled with their production amid the pandemic, the Trade official said.

“Initial naman nating discussions with them on this, mukhang kaya naman. Three years din naman ‘yung kanilang request [Based on our initial discussions with them, it appears they can meet the deadline; it was them who requested a three year-extension],” Rodolfo said.

Toyota Motors Philippines Corp. and Mitsubishi Motors Philippines Corp. have enrolled models Mirage and Vios, respectively, in the incentives program, an initiative to boost local automotive production.

CARS program participants were initially given 6 years to manufacture at least 200,000 units and to produce body shells and large plastic parts. In return, each enrolled model will be provided fiscal support of P9 billion. The program, which was signed in 2015, is given a total allocation of P27 billion.

Toyota and Mitsubishi, according to the data provided by DTI, have not yet met the half-way mark in their production.

Ma. Corazon H. Dichosa, Board of Investment executive director for industry development and services, said there are still 143,000 Mirage units and 128,000 Vios units yet to be produced.

Rodolfo earlier said while the EO extends the production period, the volume requirements of the participants will remain the same.

In addition, it will also cover investments relating to model changes by Toyota and Mitsubishi, but this will not need another budget allocation as long as the amount is within the fixed investment support.

The CARS participants, however, are yet to avail of the incentives, Rodolfo said.

The local dealer of Toyota, which accounted for 44.69 percent of the market share, saw its sales decline by 38.3 percent to 100,019 units last year, from 162,011 units in 2019.

Mitsubishi sales plunged to 37,366 units last year, which is 41.7 percent lower than 64,065 units sold in 2019. It comprised 16.7 percent of the total industry sales last year.

Total auto industry sales fell by 39 percent to 223,793 units last year from 369,941 units in 2019, according to the joint report by the Chamber of Automotive Manufacturers of the Philippines Inc. and Truck Manufacturers Association.