Approval of pending bill seen to boost demand for hybrid vehicles

NAGOYA, Japan – The approval of a pending bill in the Philippine Congress granting incentives for manufacture, assembly, conversion, and importation of electric, hybrid and other alternative-fuel cars is the key in boosting the use of such vehicles in the country, the world’s leading carmaker Toyota Motor Corp. said.

Bernie O’Connor, executive vice president for Toyota Motor Asia Pacific Pte. Ltd., said the Philippines has the potential to be one of the top users of hybrid vehicles in the region owing to its growing economy as well as increasing environmental consciousness among Filipinos.

While many countries in the region like Malaysia and Thailand offer attractive incentives for the assembly and importation of hybrid vehicles, the Philippines continues to impose as much as 20 percent customs duties on such cars, like Toyota’s Prius, making it expensive to Filipinos.

Sales of Toyota’s hybrid Prius and Lexus remain sluggish in the country, with about only one to three units are being sold a month following their launch last year because of its steep price.

In Japan, hybrid vehicles account for 40 percent of car sales. Global sales of Prius reached five million units in the first quarter of this year.

Hybrid vehicles are powered by a coordinated use of power from their gasoline engines and batteries, dramatically reducing fuel consumption and pollution.

“Incentives are aligned to the customers, and they help bridge that price gap,” O’Connor told visiting participants in the Toyota Hybrid Experience event here.

“I think in the Philippines, people are going through some changes themselves, the younger people are seeing new things and they want these,” he said, adding the countries in the region remain vulnerable to the effects of global warming.

Last year, the Philippine House of Representatives approved House Bill 5460, seeking to promote the widespread use of hybrid and alternative fuel vehicles in the country and thus lessen dependence on imported oil.

The measure, which also seeks to protect the environment by mitigating the harmful effects of carbon emissions into the atmosphere, exempts from the payment of excise taxes and duties for nine years from the effectivity of the law the manufacture or assembly of completely knocked-down parts of electric, hybrid and other alternative fuel vehicles, including the conversion of vehicles into electric, hybrid and other alternative fuel vehicles.

It also exempts from the payment of value-added tax for nine years the importation of raw materials, spare parts, components and capital equipment used in the manufacture or assembly of electric, hybrid and other alternative fuel vehicles.

The Senate version includes non-fiscal incentives geared mainly for users, including priority in registration and franchise application for public utility vehicles; exemption from number coding schemes; and free parking in new buildings.

Rommel Gutierrez, vice president of Toyota Motor Philippines, said the Japanese carmaker has clear plans to expand its plants in the country to include assembly of hybrid vehicles for local consumption and export once the bills are passed in Congress and signed into law.