Tags: Automobiles
By Nikka Garriga
MAKATI CITY, METRO MANILA— The Philippine Automotive Competitiveness Council Inc. (PACCI) has high hopes of transforming the country into a manufacturing hub that can compete with neighboring countries.
An industry road map presented during the Third Automotive Manufacturing Summit aims to upgrade the local industry from an assembly of “completely knocked down” (CKD) units to an outright manufacturer, which can compete with other countries under the Association of Southeast Asian Nations (ASEAN).
CKDs are units imported or exported in parts and are assembled in target countries.
Vicente Mills Jr., president of both the Philippine Automotive Federation and the ASEAN Automotive Federation, emphasized the need to “shift gears” to address the declining share of locally manufactured vehicles (LMV) in the domestic market.
Sales of LMVs declined from 96 percent in 2000 to 44 percent in 2010. New vehicle registrations for 2010 also tallies only 75,000 units that LMVs, or a third of the industry’s total production capacity.
PACCI’s roadmap consists of three principal stages starting with the local market buildup phase, which will include an extension of incentives for complete vehicle, parts and components exports.
Next is the expansion of local vehicle sales and of exports of the selected models for local manufacture.
The third phase will focus on the integration of the local automotive manufacturing sector into the regional vehicle, parts and components sourcing network of the brand principals.
The latter aims to establish domestic production facilities of auto parts currently not available in the local market to achieve regional competitiveness of the country’s industry.
“We must build and/or expand capabilities in manufacturing critical parts such as vehicle body stampings, injection molding of large parts, engines, suspension and steering systems and other parts that we don’t currently produce in the Philippines,” Mills said.
A strengthened partnership between the government and the private sector is also an important aspect in ensuring the success and sustainability of the drafted industry roadmap.
“We can and should aim to become an alternative ASEAN production hub. We have the strengths – a total production capacity of 250,000 units annually and an abundant supply of skilled manpower in the field of auto and auto parts and components manufacturing,” said PACCI chief Feliciano Torres.
Vehicle demand is touted to reach at 300,000 units by 2015 and can help improve the country’s economic scale through increase in local production and export revenues.
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