A labor group urged the government to weigh carefully the appeal of two carmakers enrolled in its Comprehensive Automotive Resurgence Strategy (CARS) program for a “reprieve” from meeting their production targets.
The Philippine Metalworkers’ Alliance (PMA) said in a statement that the appeal of Toyota Motors Philippines (TMP) of Misubishi Motors Philippines Corp. (MMPC) will have employment implications.
Participants of the CARS program must be able to churn out at least 200,000 units of enrolled vehicles in six years to get fiscal incentives from the government.
However, both TMP and MMPC announced last August that they may not be able to hit the target because of low sales caused by the Covid-19 pandemic.
PMA President Ruel Punzalan said he recognizes that there was a decline in car production and sales since the onset of the pandemic last March, but he noted that sales have started to pick up by August.
“In April 2020, production declined by 84 percent. By August, lost volume of production fell to 43.5 percent. Production will need to catch up soon as demand for vehicles will return early next year,” Punzalan said.
PMA also said that the car firms may be reducing local production to increase imports of completely built units, which it opposes.
“Enrollees in the CARS program will certainly not meet their production targets on time when they continue to rely on imports than expand local production. This clearly goes against the objectives of the CARS program,” Punzalan said.
He urged the government to reallocate a portion of the budget for CARS to support the displaced workers instead.