Chinese auto parts manufacturers eye RP car industry

The Department of Trade and Industry (DTI) said yesterday that prospective investors from China’s automobile and auto components industry are exploring the possibility of participating in the Motor Vehicle Development Program (MVDP).

Trade Undersecretary Adrian S. Cristobal Jr., who met recently with members of the China Chamber of Commerce, said that the Chinese delegates are seriously considering investing in the country after the DTI presented the government’s comprehensive auto industry program, including the incentives being offered to MVDP participants.

Trade and Industry Secretary Cesar V. Purisima has said that the auto industry is considered as "one of the pillars in our effort to build a sustainable foundation for a strong economy, because it creates jobs and livelihood opportunities for Filipinos."

Purisima has been urging foreign auto assemblers to take advantage of the government’s Automotive Export Program (AEP), which provides special incentives for certain completely built up units (CBUs) for exports. The AEP paved the way for Ford Motor Philippines to export its locally-made vehicles to the ASEAN market, which contributed export revenues for the country and helped local suppliers expand their businesses.

Ford was the first assembler to register under the AEP and has cumulatively exported more than 20,000 units to Thailand, Indonesia, Singapore and Malaysia since 2002 to date.

Mitsubishi Motors Corp., meanwhile, chose the Philippines as its ASEAN production base for its new sports utility vehicle (SUV). The P10 billion project will generate an additional 6,000 jobs.

Mitsubishi Motors Phils. plans to export its RP-made vehicle by year 2007.

Under Executive Order 156, new participants must commit to put a certain level of investments on parts and components manufacturing to participate: $10 million for passenger cars, $8 million for commercial vehicles and $2 million for motorcycles.

For exports of locally-assembled motor vehicles, manufacturers of regular CBUs are required to export a minimum of 10,000 units annually, which should cost at least $5,000 per unit in order to avail of the privileges under the AEP.

The MVDP, which is considered the roadmap for the development of the country’s motor vehicle industry as well as local automotive parts and components.

Auto parts and components manufacturing is listed as an investment priority area and is entitled to incentives under the Omnibus Investment Code.

Among the country’s major assemblers include Toyota Motor Philippines, Honda Cars Philippines, Inc., Mitsubishi Motors Phils., Isuzu Motor, and Nissan Motor Phils.

The top markets for Philippine merchandise exports of motor vehicles are Japan, Thailand, Singapore, Vietnam, Republic of South Africa and Taiwan (ROC).

Top components manufacturers are Yazaki-Torres Manufacturing Corp. and United Technologies Automotive Phils. for electrical wiring harnesses, Temic Automotive (Phils.) Inc. for anti-brake lock system, Honda Engine Manufacturing Phils., Inc. for engines, Asian Transmission Corp. and Toyota Autoparts Phils. for automotive transmissions, Fujitsu Ten Corp. of the Phils. for car stereos and Aichi Forging Co., Inc. for forged parts.