CKD assembling seen to create more jobs in RP

Aside from seeking more government support through incentives and tariff reprieve, local automakers are also bent on intensifying the assembly of  “complete knocked-down” (CKD) units in the country to bolster the local economy and generate more jobs for the Filipinos.

Eyeing the huge number of employment that this segment of the automotive industry can create in the future, Chamber of Automotive Manufacturers of the Philippines, Incorporated (CAMPI) president Elizabeth H. Lee in an exclusive interview with The Freeman said that this year, they will be working on sustaining and expanding CKD assembly in the country this year.

Lee, also the EVP for Marketing and Sales Group of the Universal Motors Corporation, the distributor of Nissan vehicles in the country pointed out that, “if we build and assemble the car parts here in the country, there is a Filipino value added that would definitely generate huge employment for our people. So the key here is to save our CKD assembly sector.”

Currently, the local automotive industry employs about 74, 000 people and with the CKD operation declining, Lee is seeing a plausible decrease of employment. “In order to support our growing population, there is a dire need for us to intensify this segment because expanded CKD will create natural economies of scale for us that will generate more jobs for our people,” said Lee. 

With their market expansion program, CAMPI is determined to attract top brands in the automotive manufacturing industry for them to prefer to do the CKD assembly of their new units here in the Philippines rather than on our other Asian neighbors. “We want these top car manufacturers to look at the Philippines and the kind of business environment that we have here and so they can realize our capabilities to do the CKD of their units,” stressed Lee.

In terms of skills, Lee said that we already have the right capabilities to perform better assembling of these units than our Asian neighbors. “Filipino assembly workers are even better than workers from other country because the quality of their workmanship is there already,” she said.

CKD or the complete knocked down units are car parts which have been shipped from the manufacturing plants of automakers and are assembled in the location where it will be distributed. Lee said that continued viability of CKD operations is seen to bring in more investment opportunity for the country rather than the influx of imported completely build-up (CBU) units.

CAMPI is currently at close negotiation with the government sector to tackle about ways and means to maintain and sustain the competitiveness of the local CKD operations in the country and reverse the current domination of imported CBUs. “We seek the government’s initiative for this effort for us to be competitive with our Asian neighbors,” said Lee emphasizing on the importance of the manufacturing industry that provides a long value chain and lasting effect to the economy and its people.

She added that the reasons why our other Asian neighbors have been very successful in their CKD operations is that their government provide them with better policies, incentives and technology support like India for one, which enjoys good exile tax structure that creates a positive impact to their local automotive industry.

As a P90 billion industry, the automotive industry is one big sector that generates  huge profitability for our economy and Lee said that it is just but right for the government to support initiatives that can contribute not only to generate higher revenue and tax collection but also employment for our growing population.   – Rhia de Pablo