Universal Motors to expand operations

Universal Motors Corp. (UMC), the local distributor of Nissan’s light commercial vehicles (LCV), will expand its operators in the country following the approval of the 2008 Investment Priorities Plan (IPP). wherein the government agreed to provide income tax holiday to car manufacturers that will invest in major parts and components production.

The government, through the 2008 IPP, has agreed to provide tax holiday to car manufacturers which will invest in major parts and components production.

“We will be expanding our completely knocked down (CKD) operations here,” Elizabeth H. Lee, UMC senior vice president said yesterday.

According to Lee, the investments nearly did not push through because the government considered removing the tax perks given to car manufacturers.

In the initial IPP draft, car assemblers were dropped from the list.

“They said they removed us from the IPP because not many companies are availing of the incentives,” Lee, who is also the president of the Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI), said.

Lee said they questioned the move of the government arguing that car manufacturers take a long time to set up their investment plan given the sizeable amount of money involved.

“The government has to recognize that the automotive industry is a big industry and the decision making takes more than a year,” Lee explained.

“For instance one car model will be good for five years. Our medium term covers up to eight years so we cannot be changing our plans yearly,” she added.

Lee said the decision to include the car assembly will be a big help to the industry especially since competition from the neighboring countries is intensifying.

“We cannot remove the incentives especially now that countries like Vietnam are welcoming investors with open arms,” Lee cautioned.

Lee said they will be formally announcing the expansion of their CKD operations within the year.

She refused to give details of the investment but said the expansion will create more employment opportunities.

Aside from UMC, Lee said she knows of two other car manufacturers which will be investing in the country this year.

“The industry will see a minimum of three major investments this year,” Lee said.