Carmaker joins call for auto roadmap

CEBU, Philippines - Nissan Philippines Incorporated, has joined other car manufacturing companies in the country in the call for the implementation of an automotive sector roadmap, as the country lags behind its neighboring countries such as Thailand and Indonesia in this particular aspect.

In an interview with Nissan Philippines, Incorporated  president and managing director Antonio Zara, he said that Nissan's manufacturing plant in Laguna is facing a possible closure if the government stays complacent in providing a conducive environment for car manufacturers to continue their operations here.

Nissan Philippines is maintaining an assembly plant in Laguna,  but it is producing less and less cars in recent years.

Zara said Nissan’s plant in Laguna is underutilized because it is much cheaper to import cars from other countries than to have them made and assembled here.

"We're hedge on this situation," he said adding that if the government will not support the industry, the companies will have no choice than to follow the direction where its business can thrive, amid the competitive market.

Zara, who is also a member of the board of the Chamber of Automotive manufacturers of the Philippines Incorporated, said that the Philippines has produced less and less car products over the years, because of higher cost of doing business, compared to Thailand and Indonesia.

The sector is pleading for subsidy from the government in the form of tax perks, relief of excise taxes and capital investments, and support in technology, among others.

According to the Department of Trade and Industry, which is working on the draft of the automotive industry roadmap, said the much awaited roadmap would address weaknesses such as the death of local parts-maker and “create the conditions to allow the Philippines to move from a completely knocked-down (CKD) assembly hub to full automotive manufacturing.”

The automotive sector would also need fiscal support and more incentives for local assemblers and motor vehicle parts manufacturers to gear up for the Asean integration.

Last year, the Philippines produced only 52,000 vehicles, compared with 2.5 million in Thailand, 1.2 million in Indonesia and 600,000 in Malaysia.

Thailand and Indonesia account for more than four-fifths of Asean’s automotive production.

In 2013, Thailand accounted for 55 percent of cars produced in the region followed by Indonesia with 27 percent market share, Malaysia (14 percent), Vietnam (two percent) and the Philippines (two percent).

Thailand hailed as the “Detroit of the East”, exports more cars than the rest of Asean combined (2.5 million units in 2013) and is likely to see exports rise as trade barriers fall under the 2015 Asean Economic Community.

The Philippines is one of the fastest-growing markets in the region.

Toyota Motor Philippines dominated the local market, accounting for 41 percent of sales in 2013 followed by the 24-percent share of Mitsubishi Motors and Honda, Ford and Isuzu (with seven-percent each).

Locally assembled vehicles have been losing market share to completely built up automobiles imported from South Korea, Thailand and Indonesia.

Recently, Senator Paolo Benigno "Bam" Aquino IV said that the Senate is set to look into the proposed automotive industry roadmap to ensure it is in line with other government policies and existing incentives offered are maximized.

Aquino, who chairs the Senate Committee on Trade, is filing a resolution to look into the proposed automotive industry road map.

In a report, Trade Secretary Gregory Domingo has said the government may limit the number of automotive firms that could qualify for incentives to those able to meet certain production level requirements and support the ambition of making the country a manufacturing hub.

Asked if how long could Nissan maintain its assembly plant in the Philippines, given the turtle-pace action from the government, Zara said "depends on the market condition.”  (FREEMAN)