Lopez eyes 4 major participants under PUV modernization program

Four major truck body builders and platform providers may be allowed to participate in the planned shared facility for the assembly of the modern jeepney under the government’s Public Utility Vehicle (PUV) Modernization Program, which seeks to replace the estimated 200,000 units of dilapidated and environment polluting old jeepneys.

Trade and Industry Secretary Ramon M. Lopez said at the opening of the 2nd Philippine Auto & Parts Expo that based on the existing number of industry players, four major ones could be a reasonable number of participants in the PUV Modernization Program.

Lopez, however, said that other automotive parts manufacturers may still be able to use the common facility because there are opportunities for the production of other parts and components in that facility.

Lopez said the DTI is in close coordination with the Department of Transportation in preparing the Executive Order for presentation and approval by President Duterte within the year.

Funding for the shared facility project will be taken from the unutilized third slot of the CARS (Comprehensive Automotive Resurgence Strategy) Program, which has an allocated budget of 19 billion that will be realigned for the common facility for PUV production.

Lopez said the common facility is meant to reduce the cost of production and price of the PUV model.

For instance, the cost of comparable imported PUV is 11.3 million to 11.4 million while the local production is 11.6 million without any government assistance, the common facility would be able to bring down the cost to the level of the imported PUV.

“This will make the local PUV more competitive and PUV operators to prefer them than imported because they have built a modern PUV that is safe and durable plus the local producers have already the reputation,” he said.

At present, there are an estimated 14 body truck builders and platform providers for PUV production.

Ferdinand Raquelsantos, president of the Philippine Parts Makers Association (PPMA) said program participants expect the facility would include a painting process or common paint bath for PUV parts and bodies, a testing facility for certification purposes, common chassis production, plastic parts injection, and press parts.

To ensure economies of scale, Raquelsantos said that other automotive parts components manufacturers like automotive glass can also locate in the same facility.

“Hopefully, more players and suppliers are going to participate to bring scale because the PUVs have the same design and body specifications in order to bring down the cost and price,” he said.

In addition, Lopez said the common facility is a government-initiated program but they may allow a private operator to run the facility to make it sustainable in the long run.

The two-day expo featured the locally-developed PUV models that are among the choices which the government may consider in the implementation of the proposed PUV modernization program.

The expo also highlighted the manufacturing capabilities and potentials of the local industry which merit the support and attention from the government.