The automotive industry is poised to hit another record-breaking sale this year, at 500,000 units, and will post an average growth rate of 10 percent in 2025 onwards, the Chamber of Automotive Manufacturers of the Philippines Inc. (Campi) said,
But Campi is seeking further government support through incentives to those that are expanding their manufacturing operations at a time when imports are becoming more competitive.
At present, 70 percent of total sales are imported vehicles, according to Rommel Gutierrez, Campi president.
Campi is pushing for the extension of the Comprehensive Automotive Resurgence Strategy (CARS) or the creation of a similar program where a locally-assembled vehicle will be granted production and volume-indexed incentives.
“We want a CARS-like program to continue because (government) needs to support local manufacturing. CARS is a good program. We would prefer something like CARS because the targets and commitments from both government and private sector are very specific,” Gutierrez said.
He said CARS needs to be formally extended to open the third slot for a qualified participant. CARS had only two models, Toyota Vios and the Mitsubishi Mirage and Mirage G4.
Gutierrez did not discount the possibility of Toyota Motor Philippines Corp. (TMP) enrolling the Tamaraw, which will roll off from its Santa Rosa, Laguna manufacturing facility starting November 28, to the third slot of CARS.
Gutierrez also said Campi is pushing for the legislation of the preferential tariff on electric vehicles (EVs) to make the incentive more permanent.
The duty waiver on EVs of all technologies will be in place until 2028 and is subject for review annually.
The industry has achieved more than 70 percent of its original target of reaching 468,000 units when it sold 344,307 units as of September.
With sales traditionally higher in the last quarter and more product launches, Gutierrez is confident the aspirational aim of hitting half a million units. “We are almost there.”
Total industry will grow an average of 10 percent annually, he added.
Meanwhile, Campi does not see the free trade agreement (FTA) between South Korea and the Philippines to have a significant impact on local sales.
However, Gutierrez said Campi believes it is time to review the Japan-Philippines economic partnership agreement (JPEPA), particularly on automotive tariffs.
According to Gutierrez, the automotive players in the Philippines, including the South Korean brands, source most of their vehicles from Asean where tariffs are at zero. Vehicles sourced from Japan are mostly the high-end ones, such as Land Cruiser and Alphard in the case of market leader Toyota Motor Philippines Corp.
Tariffs on vehicles from South Korea are now at 5 percent under the Asean-Korea FTA but will be eliminated once the FTA comes into force.
Tariffs under JPEPA are zero for vehicles with engine size of above 3 liters and 20 percent for those with engine size of up to 3 liters.
“The intention was to protect local manufacturing because the industry was producing only those with engine size of 3 liters,” Gutierrez said.
