The Philippine Board of Investments (BoI) announced the approval of Mitsubishi Motors Philippines Corporation and Toyota Motors Philippines Corporation as participating car makers of the country’s Comprehensive Automotive Resurgence Strategy (CARS) Program.
Trade Assistant Secretary Rafaelita Aldaba said that the CARS Program aims to raise local vehicle manufacturing to expand the country’s auto parts making capabilities. CARS is expected to attract PHP 27 Billion in fresh investments, manufacture 600,000 more vehicles, and add PHP 300 Billion to the domestic economy (equivalent to 1.7 percent of gross domestic product).
“The government has set a high level of ambition for the CARS Program, targeting the need to promote an economically-viable scale of production that will allow our auto sector to compete within the region for specific auto models,” Aldaba said.
Participating car makers of the CARS program will have to comply with performance-based terms and conditions including the minimum output of 200,000 units over the six-year program period and local production of body shell and large plastic parts.
Aldaba said that the program is expected to generate up to 200,000 direct and indirect jobs in auto manufacturing, parts making, distribution, and ancillary services. The implementation of the CARS program over the next six years is expected to benefit the chemicals, metalworking, tool & die, plastics, electronics, rubber, glass, and textile sectors.
Mitsubishi applied to produce 200,000 units of the Mirage/Mirage G4 while Toyota applied for the production of 230,000 units of an all new (full model change) Vios. As participating carmakers, they are required to localize the production of body shell and large plastic parts and components.
Currently, large body parts and components are imported and render local vehicle manufacturing uncompetitive. These and other parts not currently produced in-country are expected to be introduced during the six-year CARS program period.
Mitsubishi will start production in 2017.
“Given its strong linkages to allied industries, the CARS Program is at the core of the government’s Manufacturing Resurgence Program,” she added.
The implementation of CARS follows rigorous application, evaluation and approval processes stipulated under Executive Order (EO) 182. Under the EO, an Inter-Agency Committee was formed to evaluate the applications for endorsement to the BOI Board.
The government sees increased economic activities from the CARS Program.
Toyota and Mitsubishi’s initial investments totaling P8 billion will create some 14,000 new jobs, salaries and wages of which will also amount to Php8 billion over a six year period. Parts makers who will be working with Toyota and Mitsubishi are expected to generate over Php18 billion fresh investments for the country.
The CARS Program also expects total government revenues to amount PHP408 billion in import duties, VAT, excise tax, income tax, withholding taxes. Direct purchases of raw materials for parts making will amount to Php63 billion.