THE Department of Trade and Industry (DTI) said the terms of the recently announced five-year extension of the Comprehensive Automotive Resurgence Strategy (CARS) incentive program have yet to be determined.
Trade Undersecretary Ceferino S. Rodolfo said in a recent briefing that no formal discussions have been scheduled.
The program’s participants commit to assemble certain volumes of mass-market vehicles in the Philippines in exchange for tax breaks.
“The details are still being arranged, like the conditions and terms. Is it just the number of years? Is it the number of models? If you are allowed, what will be the conditions?” Mr. Rodolfo said.
Mr. Rodolfo said a key item that needs to be decided is whether participants need to enroll another model in the program.
In May, the Private Sector Advisory Council (PSAC) said that President Ferdinand R. Marcos, Jr. approved its recommendation for a five-year extension of the CARS program to support expanded domestic activity in the automotive industry.
According to the PSAC, the extension will continue to incentivize manufacturers that meet the requirements for investment and production levels and technology transfer.
Mr. Rodolfo said the CARS program has helped increase the localization rate of vehicle parts. He did not provide detailed figures.
“With the CARS program, we were able to help parts makers survive. Our localization rate increased,” Mr. Rodolfo said.
“If there was no CARS program, there might be 0% locally-manufactured new vehicles. What would happen to the parts makers?” he added.
The CARS program was launched on the strength of Executive Order No. 182 in 2015, which required participating car manufacturers to produce at least 200,000 units of an enrolled model in order to avail of incentives. Production of the enrolled model is eligible for P9 billion worth of fiscal support.
Toyota Motor Philippines Corp. (TMP) produces the Vios sedan for the program, while Mitsubishi Motors Philippines Corp. (MMPC) manufactures the Mirage hatchback and Mirage G4 sedan.
Prior to the five-year extension. MMPC was given until this year to meet the required quotas. TMP was allowed until next year.
As of December, TMP has assembled 134,242 Vios units, with MMPC producing 72,923 Mirages, the DTI said. — Revin Mikhael D. Ochave