CARS models achieve 42% local content
Local content in domestic automotive manufacturing more than doubled to 42 percent from only below 20 percent following the implementation of the Comprehensive Automotive Resurgence Strategy (CARS) Program, reported a top official of the Department of Trade and Industry (DTI).
DTI Undersecretary Rafaelita Aldaba said at the business roundtable “Reinvigorating the Philippine Manufacturing Sector for Job Creation” hosted by think tank Stratbase ADR that CARS Program participants Mitsubishi Motors Philippines Corp. (MMPC) and Toyota Motor Philippines Corp. (TMPC) registered 42 percent local content in their car manufacturing.
Due to the localization under the CARS Program, Aldaba said that both carmakers registered 42 percent local content compared to below 20 percent prior to the program.
“The estimated foreign exchange savings brought about by the localization of production amounted to $1 billion,” said Aldaba.
MMPC and TMPC have combined P9.3 billion in registered investments for the assembly of their respective CARS models. With that the firms are also granted tax and fiscal incentives equivalent to P45,000 per unit of vehicle manufactured to help close the competitiveness gap and kickstart vehicle development in the country.
Under the tax incentive-driven CARS program, each participant must produce 200,000 units of their enrolled car model over a period of six years.
MMPC, which has a production capacity of 200,000 units, is producing the Mirage car model while TMPC has production capacity of 230,000 units for the assembly of its Vios model at its plant in Sta. Rosa, Laguna.
Aldaba further reported that the CARS program, which started in 2016, the program was able to register and supported a total of nine new parts makers, created a total of 5,751 direct employment, additional 17,368 employment in parts making and 86,840 in ancillary parts making. This on top of the firms’ existing buyers and suppliers.
The program, which started implementation in 2016 jumpstarted auto manufacturing, aimed at stimulating investments in manufacturing, generating quality jobs, creating a competitive industry, and supported the aspiration to become a regional hub in the future.
Aldaba cited the CARS program as concrete example of DTI’s inclusive innovation industrial strategy or iCubeS with focus on innovation to adapt to changing market trends.
In fact, she said that DTI is also looking at similar CARS Program to support its ambition to become a hub for electric vehicle manufacturing.
She cited that the power of technology should be able the anchor for the country’s industrial transformation and increase the share of manufacturing industries in the overall gross domestic product (GDP) in the country.
“We want to see for us to achieve 30 percent share of GDP because now we’re at 20-21 percent through the adoption of new technologies,” she added.