MANILA, Philippines - Toyota Motor Philippines Corp (TMPC) said it will be doubling the local content of its locally produced vehicles in order to be more competitive and help the Philippine auto parts industry.
In an interview with reporters, TMPC president Michinobu Sugata said they are planning to increase the local content of their vehicles. “We will increase to at least 40 percent; otherwise we cannot be competitive.”
Sugata said the current local content of their vehicles is between 20 percent to 25 percent.
He said they will be inviting more suppliers to locate in the Philippines and hopefully revitalize the local auto parts industry. The government is trying to encourage autoparts makers to increase their production.
Sugata said this is a good time for the Philippines to encourage Japanese autoparts makers to locate in the Philippines. He said the current exchange rate will make the Philippines a viable investment destination.
He said the appreciation of the yen against the peso, coupled with the calamity in Japan, boost the chances of the Philippines to attract more autoparts locators. “To grow the manufacturing business, the most important is the parts. We need parts suppliers more and the Philippines has a very good chance of attracting them.”
Sugata said he agrees that there is a need to revise the Motor Vehicle Development Plan (MVDP), the implementation of which has been delayed for over a year as Trade Secretary Gregory L. Domingo has questioned some of its provisions.
The MVDP or EO 877-A was expected to increase investments in the automotive industry by making the country a more attractive destination for carmakers. This was signed by former President Arroyo before she stepped down from office. The implementing rules and regulations (IRR) should have been completed in the third quarter last year.
The implementation of the MVDP has been delayed because the IRR for cars cannot be completed. The IRR for motorcycle and second hand vehicles were finished ahead of the car component.
The inclusion of the private sector component in the MVDP is one of the major reasons why the government still has not come out with the implementing IRR for Executive Order 877-A.
Domingo said he is not convinced that there should be private sector representatives in the council.
Because the inclusion of industry players in the council is in the EO, Domingo said they are seriously considering re-issuing the MVDP.
“We are thinking of scrapping the MVDP and creating a new one. We are just evaluating the reaction of the industry because they may not be amenable to this,” he said.