CARS Program Approved
As a result of the Automotive Industry Roadmap by the private sector and the DTI-BOI, the CARS Program calls for fiscal and non-fiscal incentives to jumpstart the revitalization of the country’s automotive industry, improve its competitiveness and elevate the country into an auto manufacturing hub in the region.
The program is designed to build and grow the parts making capability of the auto industry, “for without a robust parts making industry, our car making industry will remain uncompetitive. The CARS program is about building capabilities and jobs to make our automotive manufacturing industry competitive in ASEAN,” said DTI Secretary Gregory L. Domingo.
Expected to create about 200,000 direct and indirect jobs in the industry throughout the six year life of the program, CARS calls for new investments in manufacturing parts not currently available in the country, like large car body panels, bumpers, instrument panels, head lamps, shock absorbers, plastic fuel tanks, automotive fabric and others
. The technology “spill over” will help develop basic support industries for manufacturing, such as casting, forging, machining and tool & die.
DTI Undersecretary and BOI Managing Head Adrian S. Cristobal Jr. said, “After thorough study, extensive stakeholder consultations and inter-agency coordination, the government’s CARS Program will be implemented with the signing of the E.O.”
CARS offers a package of time bound and performance based fiscal incentives to support new investments in fixed capital expenditures in new parts making capability and to encourage large scale production in vehicle assembly. The government intends to provide annually an average of PHP 4.5 Billion worth of incentives for six years to support three (3) models. This is expected to attract more than Php27 Billion in new parts manufacturing investments, produce at least 600,000 vehicles and generate a total economic activity estimated to be worth Php300 Billion over the life of the program. The resulting contribution to Gross Domestic Product (GDP) is estimated at about 1.7%.
“As parts making capability develops and production reaches economic scale, we expect consumers to benefit from lower prices of cars and spare parts,“ added Undersecretary Cristobal.
The Executive Order on CARS is expected to be published in newspapers of general circulation within the next few days.