BOI prepares new roadmap for auto industry

MANILA, Philippines - A road map for the automotive industry will be released within the next two months as the government is still looking at ways on how it can provide incentives to local car manufacturers without reducing excise taxes, a trade official said.

“Right from the start, we have been supportive of the auto industry. We are hoping to come up with a road map in the next few weeks or two months,” Board of Investments executive director Lucita Reyes said in a press conference yesterday.

She said the government is still holding consultations for the road map which seeks to promote the development of local manufacturing of vehicles.

The government is looking at ways to develop local manufacturing and make cars produced here more affordable without reducing the excise taxes imposed on these vehicles.

Reyes said that while the reduction of excise taxes on cars produced here can help local assemblers, it would be difficult to implement since it would require a legislative measure.

She said among the incentives being studied instead of lowering excise taxes, is the refleeting of vehicles that are 10 years and above.

Such move could create a market for new local cars produced here as she noted that 1.7 million of the total 3.1 million vehicles registered with the Land Transportation Office are more than 10 years old.

Apart from the phaseout of old cars, Reyes said the government is likewise considering the use of new technology or the manufacture of alternative fuel vehicles in the Investment Priorities Plan so that local manufacturers’ assembly of such could qualify as a pioneer activity and would be entitled to incentives such as income tax holidays.

She said the government wants to develop the local manufacture of cars as it contributes to the economy by providing direct employment to some 868,000 individuals.

Last year, more imported cars were sold in the country compared to those locally produced with the ratio at 52:48.

Reyes said among the reasons for the bigger volume of imported cars in the country compared to those locally produced are the small market for vehicles and fewer available parts and components here.

Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI) president Rommel Gutierrez said the industry has been active in the crafting of a road map.

“We have not seen the details of the road map, but we are happy the government is serious and is looking after the CKD (completely knocked down) and CBU (completely built units),” he said.

He said that amid positive economic conditions, total industry sales are seen to rise 10 percent this year from last year.

Association of Vehicle Importers and Distributors, Inc. (AVID) president Fe Perez-Agudo expresses optimism this year would be a good year for the industry.

Based on the reports of the CAMPI and AVID, there were 184,248 units sold last year

Total vehicle sales last year posted an 11.6-percent increase from 2011 due to the strong demand for both passenger cars and commercial vehicles.