WHAT is this motoring model just recently unveiled by the Aquino administration? Is it really supposed to be a breakthrough bash to make us abreast with our neighbors in a region whose gorgeous groovy growth has now become faster than when Maria Sharapova changes wardrobes inside the tennis locker room?
Is it true that P-Noy’s latest economic spin has become perfectly palatable to our carmakers, as to make them grab it hook, line and sinker? Listen to Greg Yu, the Benz big shot-cum-my golf buddy: “With the signing of [Executive Order] 182, the automotive industry now has a clear road map that will guide it through sustained growth.
This will cement industry forecast of 310,000 units sold this year [from 270,000 in 2014]. The robust domestic consumption also paves the way for assembly, parts/whole car manufacturing and a strong possibility for export. We support the signing of the CARS Program and we look forward to a strong era of motorization here in the Philippines.”
It seems natural for us to react to the new automotive scheme in a rather positive way as anything that bears trappings as industry growth engine is always like soothing rain in the heat of a searing summer sun.
Said Maricar Parco, the gutsiest BMW lady chieftain ever this side of the universe: “We welcome such programs that aim to boost the growth of the industry and further strengthen our economy.
However, we have yet to see the full content of EO 182 and identify provisions that provide benefits to the industry and the motoring public. The key to the success of the program will be the effective and timely rollout of the implementing rules and regulations [IRR], as well as the strict adherence to the policies to ensure its sustainability.”
Ju get the drift?
Indeed, it takes two to tango, so that a government-private union will only achieve unity if the parameters are clearly pronounced and next followed to the letter. At the outset, Mr. Aquino’s EO 182, a.k.a. the Comprehensive Automotive Resurgence Strategy (CARS) Program, is designed to grant perks to investors, chief of which are robust tax incentives.
The CARS Program is twofold—the Fixed Investment Support (FIS) and the Production Volume Incentive (PVI). A whopping P27 billion (not bad) has been earmarked for it in the boldest move yet by the government to transform the country into an automotive-manufacturing monster to be at par with the region’s leaders five years from now—if not earlier than that.
Rene So, the president of Toyota Dealers Association, said: “If EO 182 is implemented properly, it will help the car manufacturers in sourcing for more local car parts and reducing costs.
It will also make it more viable for the car manufacturer to produce cars and more car models in the country.”
The FIS is a program encouraging investors to finance/make a car model using locally made parts under shared testing facilities in accordance with a prescribed period set by the Board of Investments. In contrast, the PVI will tackle the volume for parts and vehicles to be produced, aided by tax/duty cuts on income, import and value-added tax concerns. Said lawyer Rommel Gutierrez, the Chamber of Automotive Manufacturers of the Philippines Inc. president: “EO 182 is a challenge and an opportunity not only to existing carmakers but also to those planning to set up plant in the Philippines.
It is definitely good for the industry and motoring public as it will give birth to new technologies, investments, employment opportunities and increased contribution to government coffers.”
To be sure, EO 182 is good. But as in many new ideas, there will always be wrinkles, perceived or otherwise, that might—God forbid!—prove disastrous in the end.
Here’s Glen Dasig, the new Peugeot president: “Any new program for the industry is definitely a welcome move. It will create jobs, help move the economy and spur further growth. I’m just hoping it will be an ‘inclusive’ program for all industry players, especially for new brands like Peugeot.”
And, yes, isn’t the ceiling of 200,000 units manufactured in the next six years as an incentive-condition for a share of the P27-billion fund too stiff a challenge to face, if not too hard to hurdle? Take it from Danny “Sir John” Isla, the Lexus president: “I hope the new program will really encourage investments that will accelerate the development of the industry and provide significant employment opportunities for the good of the economy in general.
I am all for the good intentions of this program. However, I find the required volume of not lower than 200,000 units for a model life of six years to qualify for incentives to be very unrealistic at the current automotive business landscape.”
So there. And this is just a warm-up. More next week.
PEE STOP The now-iconic Toyota Road Trek to Kandaya Resort in Daanbantayan, Cebu, last weekend was a smashing success that it almost bettered its 10 predecessors! Watch out for my reportage on it here soon but, meanwhile, here’s to the team built by Toyota top guns Michinobu Sugata, Yohei Murase, Jose Ariel T. Arias, Raymond Rodriguez, Sherwin ChuaLim, Carlo Ablaza and Takao Arai who run the unforgettable affair. Saying they outdid themselves would simply be an understatement. So, here’s to the Flawless Team, headed by Jade B. Sison. They include Miko Hernandez, Missy Ty, Carlos Mendoza, Bea Villegas, Paul Reyes and Joel Peñalosa. Take a bow, fellas!