The government is willing to extend by three years the timeline for compliance with the Comprehensive Automotive Resurgence Strategy program to give automotive assemblers sufficient time to comply with the volume requirements amid the pandemic.
Board of Investments managing director Ceferino Rodolfo said the pandemic had made it very difficult for participants in the CARS program to meet the volume requirements because of the health crisis.
“We know that they are operating at a very difficult economic environment now. That’s why we are willing to take a look at their proposals. If they have specific proposals on the volume requirement, on the timeline for the volume compliance requirement, we are willing take a look at it,” Rodolfo said over the weekend.
Rodolfo said the government was considering a longer period for the CARS participants to comply with the volume requirement without adjusting the volume.
Under the CARS program, participant-companies Toyota Motor Philippines Corp. and Mitsubishi Motor Philippines Corp. are required to produce 200,000 units each of their enrolled models, which are the Vios and the Mirage.
The two companies invested more than P9.5 billion on machineries and parts manufacturing.
“Now is the time for them to submit specific recommendations backed up by data. What’s happening, in particular, on enrolled units compared to the overall sales this pandemic will be considered,” Rodolfo said.
The BOI will also reconvene the inter-agency committee on CARS to determine if there are applications for variable incentives, which should kick in if and when participants sold their first or first few units, according to Rodolfo.
The committee earlier tapped a third-party auditor that checked the companies’ investments in machineries such as metal press machines and dyeing facilities and determine if they are qualified to gain incentives.
Rodolfo said the IAC would help the companies comply with the program, “but at the same time making sure that we are able to maximize the benefits from the CARS program given the current context.”
He said the BOI was also looking at “probably” allowing participants to migrate to another model that is also locally-manufactured.
“But, what I’m fearing is that they might bring in models that are not locally-produced into the program and forget about the models they have enrolled. What does it make of the program if that happens?” he said.
CARS, a 6-year incentives program, is in its fourth year of implementation. It involves P27 billion worth of time-bound fiscal and non-fiscal incentives for registered participants.
The program targets to generate 200,000 new jobs, bring in fresh investments worth $1.2 billion, stimulate local demand by increasing vehicle sales to $9.2 billion and effectively implement industry regulations to revitalize the Philippine automotive industry.
The program is anchored on the resurgence of the automotive manufacturing industry and in priming the country as a regional automotive manufacturing hub.
