Honda Cars to set up Subic distribution hub

Honda Cars Philippines Inc. (HCPI) will set up a distribution hub inside the Subic Bay Industrial Park, Subic Bay Metropolitan Authority (SBMA) chairman Felicito C. Payumo announced yesterday.

"The SBMA board approved the proposal of HCPI to engage in the importation, storage and trading of brand new Honda vehicles inside the Subic Freeport," Payumo said.

Under the proposed operations scheme submitted by Gabriel Pena, HCPI assistant vice president for vehicle sales and business development, HCPI projects to import 400 units of Honda vehicles from Japan and other ASEAN countries every month for domestic distribution in the country.

It was not immediately clear though if HCPI’s imports would be tax and duty-free and if it would have to pay the corresponding taxes and duties once the vehicles are distributed to HCPI’s dealers.

However, with the effectivity of the ASEAN Free Trade Area (AFTA)-Common Effective Preferential Tariff (CEPT) this year, tariffs within the region are now down to zero to five percent.

Thus, even though Honda has assembly operations in the country, it can now import models into the country which are not covered under the Motor Vehicle Development Program (MVDP).

Previously, under the MVDP, imports of completely built-up units (CBUs) were subject to a 30-percent tariff.

According to Payumo, HCPI is entering into a 50-year lease contract with the Subic Bay Development and Management Corp. (SBDMC) for a 5,016-square meter area within the Subic Bay Industrial Park.

HCPI plans to put up a warehouse and branch office in Subic. It has earmarked P5 million for the construction of the warehouse facility.

Payumo is hoping that Honda will eventually put up a car assembly plant in Subic.

"The SBMA hails the decision of Honda to set up its distribution facilities in Subic Freeport, Payumo said, adding that "since they are entering into a long-term lease agreement, we are looking forward to a larger operation...possibly a car assembly plant to create the much- needed jobs for Filipinos."