Government urged to limit entry of used vehicles

The government should try to control the issue of smuggling of used vehicles in order to make the country more competitive in terms of vehicle production.

In a paper written by Rene Ofreneo, executive director of Fair Trade Alliance, he said the Philippines does not figure prominently in the production radar of the global carmakers because of under utilization of car plants.

"Because of the realities of liberalization/globalization and the mistakes of the past, there is no Filipino car company in the horizon that is likely to emerge and compete with the existing global car- makers head-to-head in the liberalized Philippine market and in the bigger ASEAN and global markets," the paper said.

According to the paper, the existing assembly plants of carmakers Toyota, Honda, Mitsubishi and Isuzu are "grossly under-utilized". It said that for some, as low as 40 percent of the entire plant capacity is being used.

In order to increase capacity utilization, the paper suggested reducing the smuggling of used vehicles. It said smuggled cars have already outnumbered locally assembled vehicles.

"What is needed is the political will of the government enforcers to stop the smuggling of these second-hands, for after all, these are bulky imports, which can not be hidden from the naked eyes of the customs officials," the paper stated.

The existing assembly plants of Toyota, Honda, Mitsubishi, Isuzu and other carmakers are grossly under-utilized, some as low as 40 percent or there- abouts. On the other hand, these ‘surviving’ assemblers are not prepared to abandon these assembly plants in favor of the import-and-distribute business mode, which the Korean and other carmakers seem to have adopted.

Also, the paper suggested negotiating with Japanese carmakers to assign more car models and auto parts to be built here in the country. Still another approach is the ‘Malaysian solution’, that is, requiring all government offices and public utility operators to buy only locally-assembled vehicles.

The paper said the country has the potential to be a regional hub for auto parts and components given the Philippines’ capacity to produce world-class automotive parts and components such as wire harness, transmission, tire and battery.