TO ENCOURAGE LOCAL PRODUCTION: BOI to ease car assembly rules

    Enhanced program. Some of the processes will be liberalized to entice the production of more vehicle models in the country.
    Enhanced program. Some of the processes will be liberalized to entice the production of more vehicle models in the country.

    The Board of Investments (BOI) is reviewing the current Motor Vehicle Development Program (MVDP) to pave the way for the assembly and manufacture of more vehicles in the country, according to BOI director Corazon Dichosa.

    Dichosa told reporters in an interview last week the MVDP will be enhanced by allowing completely knocked down (CKD) production in stages.

    She added the investment requirements under the current MVDP — $10 million for passenger cars, $8 million for commercial vehicles and $2 million for motorcycles — are also being reviewed, this time with a tweak where the BOI will check on the amount of investment needed for a specific model that the participant promised to assembly.

    Dichosa said existing MVDP participants will be asked to express their intention to retain registration and accreditation as MVDP participants . Along with the letter of intent are the names of models they are currently assembling and will assemble in the future.

    This way, Dichosa said, the BOI will be able to clean up its records for delinquent MVDP participants.

    The industry groups Chamber of Automotive Manufacturers of the Philippines Inc. and the Truck Manufacturers Association as well as individual companies have submitted their comments on the initial draft of the new MVDP.

    The BOI is processing the contents of these position papers for the next draft of the amended MVDP.

    “Some (industry players) are opposing it,” said Dichosa without elaborating.

    She added: “The review is meant to enhance the program because the (number of) models being done here is not increasing. We are trying to enhance it in a way that we can attract more models to be done here. The investment requirement may be adjusted…. we might introduce stages of assembly to qualify as MVDP participants.”

    Dichosa said the present MVDP requires participants to immediately go into CKD assembly.

    “Under the plan, we can look at other stages of assembly,” she said.

    Some options include allowing the entry semi-knocked down kits and market testing schemes.

    But Dichosa clarified the new MVDP is different from the Comprehensive Automotive Resurgence Strategy which has a provision on mandatory parts manufacturing and grants fiscal support.

    “(The new MVDP) would be like your current MVDP but there will be liberalization in some processes… that is, the stages of assembly,” she said.

    MVDP participants are entitled to a preferential 1 percent tariff on imported parts and components.