CARS Program favors incumbents over new entrants — Volks PH

Volkswagen Philippines has categorically stated it is not participating in the government-sponsored CARS Program, which grants $600 million in tax support to qualified participants, stressing the program is favorable only to existing car players, but not to a new local market player.

John Philip Orbeta, VW Philippines president and CEO, told reporters at the recent Competition Breakfast Dialogue organized by the European Chamber of Commerce of the Philippines they have been consistent with their position from the very start about the planned CARS Program, which extends $600 million in tax subsidy to three car models with each model producing 200,000 units over a six-year period.

“No new entrant can guarantee 200,000 units in six years,” said Orbeta, adding that “it’s very difficult to make new entrant to make a commitment on an entirely untested market.”

Although Orbeta did not state that the CARS Program discriminates new industry entrants, he stressed “It is favorable to incumbents, it’s not attractive to new entrants.”

He noted though that this treatment to new entrants does not apply to VW alone but to all other new entrants.

Even if it is a combination of models, Orbeta said it would still be difficult citing that it took how many years before Toyota Motor Philippines, the country’s largest car company, has reached the 30,000 unit sales mark for its best-selling model Vios. Toyota is expected to field in the Vios model as its entry in the CARS Program.

“Mitsubishi is not even hitting 30,000 and they’ve been here for how many years and you’re