The government is giving local automotive assemblers another three years to comply with the requirements of the Comprehensive Automotive Resurgence Strategy to avail of fiscal incentives, a Trade official said over the weekend.
Board of Investments managing head Ceferino Rodolfo said an executive order was being prepared to give participating car companies nine years to sell at least 200,000 units each, longer than the original six years.
“We are confident that an executive order on the recommendation of the inter-agency committee for the extension of compliance period for the CARS program will be issued before end of June this year,” said Rodolfo who is also an undersecretary of the Department of Trade and Industry.
The IAC includes government agencies involved in the CARS program, including the Department of Finance.
Rodolfo said the IAC decided to extend the period of compliance for participating automotive companies. He said the volume requirement and the minimum investment of P9 billion would be retained.
“We do understand the challenging unforeseen circumstances including the impact of the pandemic on automotive demand. Considering this, not only the automotive industry was affected, the pandemic did not leave any industries or sectors unscathed,” Rodolfo said.
Under the CARS program, participant-companies Toyota Motor Philippines Corp. and Mitsubishi Motor Philippines Corp., are required to place investments on capital equipment to sustain production of 200,000 units each of enrolled models, which are the Vios for Toyota and Mirage for Mitsubishi.
The two companies spent over P9.5 billion in capital investments on machineries and parts manufacturing.
For fixed investments, the IAC previously conducted an audit through a third-party auditor that checked machineries such as metal press machines and dyeing facilities to determine if they were 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.
CARS, a six-year incentives program is on its fourth year of implementation. It aims to provide 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.