The Department of Trade and Industry (DTI) has committed to release the implementing rules and regulations (IRR) of the Comprehensive Automotive Resurgence Strategy (CARS) next week then finalize the list of participants by year-end.
“We expect to release the IRR next week, and our target is by year-end, it must already be clear who among the applicants are qualified,” Trade Undersecretary Adrian S. Cristobal Jr. said.
The CARS Program, seen as the cornerstone of the government’s Manufacturing Resurgence Program (MRP), seeks to make the Philippines a major auto-manufacturing hub in Asia.
Embodied in Executive Order 182, the CARS requires a production-volume hurdle of at least 200,000 units over a period of six years and substantial investment in order for car manufacturers to be eligible for the incentives available under the program.
There is no fixed amount on the investments, Cristobal clarified.
In exchange for the infusion of investments in auto manufacturing, the Board of Investments will grant fiscal perks to the tune of P27 billion. This will come in the form of the Fixed Investment Support Incentive and Production Volume Incentive.
The program will cover three vehicle models, with an allotment of P9 billion each.
On the complaints of auto makers that the CARS is discouraging to new entrants, Cristobal emphasized that the program is meant to filter the serious auto players that have plans to cater to overseas markets.
“This program is not meant for everyone; it’s meant for the serious investors with plans to make the Philippines a regional hub, which means they are not limiting their vision to the domestic market,” Cristobal stressed.
Two car firms are said to be interested in the program: Toyota Motor Philippines Inc. and Mitsubishi Motors Philippines Corp.
This was confirmed by Cristobal during a budget hearing at the House of Representatives.
Meanwhile, the CARS Program became a central point of interest for Japanese auto-parts suppliers and manufacturers at a recent investment forum held in Japan.
“There was positive and strong interest from the parts manufacturers and suppliers, and they are also waiting for the IRR,” Cristobal said.
With the expected release of the IRR next week, the DTI is eyeing to finish the application and evaluation process by the end of the year.