R9-B perk package for PUV assemblers
Selected 4 platform suppliers
The government is eyeing the grant of tax incentives amounting to R9 billion for the selected 4 platform suppliers and 4 truck body builders that will produce a minimum of 200,000 units of Philippine utility vehicles (PUVs) to replace the old and dilapidated jeepneys over a six-year period.
Bong Cruz, who represented the Automotive Body Makers Association of the Philippines (ABMAP)) at the recent meeting of the Department of Transportation (DOTR) with jeepney operators, suppliers and other stakeholders for the government’s Philippine Utility Vehicle Modernization Program, explained that the program is a free for all but only four will be granted government incentives.
The incentives will be implemented via an executive order that will spell out the shift of the unutilized third slot of the CARS Program, which grants a total of $600 million incentive package for three participants but attracted only two participants.
The PUV modernization is already on its first phase, 2018-2019, with the final specifications of the PUV models already approved by the Bureau of Product Standards (BPS).
The remaining incentive could be granted to volume production and fix investment support, similar to the CARS Program, but instead of one brand and one model per participant for each slot, there shall be 4 platform suppliers and 4 truck body builders that should be selected among the applicants.
Cruz explained that the PUV incentives may kick off only on the second phase of the program PUV modernization program from 2020. At present, supply of PUVs is still free for all, local production and imports as long as they meet the specifications approved by the BPS. It would still be a free for all market during the second phase but only the registered participants will be granted incentives.
The incentives are meant to ensure that local manufacturers will be able to compete with the pure importers.
Cruz said that some truck body builders and platform suppliers have also started filing their application for the program.
Body builders and platform suppliers will have to qualify. Foremost, they have to undertake local assembly and must have a track record.
All of them must also invest and produce locally.
At the end of the program, the vision is that chassis or platform must have local content of 50 percent and the body with 75 percent local content.
At the recent meeting called by DOTr, it was estimated that there is a need for 3,000 PUVs this year alone from cooperatives and other transport organizations. It was estimated that 2,000 of these demand would come from the Cavite transport groups and operators.
Cruz, who is also the technical development officer of Centro Truck Body Builders, said Centro has the capacity to produce 10,000 PUVs over a two-year period, which could be during the second phase of the program.
The Bureau of Product Standards has already come up with the initial dimension for the planned 4 PUV classes.
So far, there are already local five motor vehicle body builders participating at the expo including Almazora Motors Corp., Centro Manufacturing Corp., Del Monte Motors, Hino Motors Philippines Corp. and Sta. Rosa Motor Works Inc. At least three Chinese suppliers are also positioning themselves to bring in their models at significantly lower prices.
There are also 8 platform suppliers such as Foton Motor Philippines, Diamond Motors Corp. (for Mitsubishi Motors Philippines Corp.-FUSO), Hino Motors Philippines Corp., Hyndai Philippines, IKK Ichigan Inc., Isuzu Philippines Corp., Philippine Utility Vehicle (PhUV) Inc., and Pilipinas Taj Autogroup Inc. (TATA).