Toyota Motor Philippines Corp. (TMP) said the Comprehensive Automotive Resurgence Strategy (CARS) program has to be extended until 2027 so it can achieve the objectives of the program.
TMP First Vice President Rommel R. Gutierrez said on the sidelines of the inauguration of Toyota Mobility Solutions Philippines Inc. on Friday that TMP has already produced around 60 percent of the 200,000 units required under the CARS program as of July.
Under the CARS program, Toyota must deliver its commitments under the program by 2024.
Gutierrez cited the change in administration and certain factors that caused disruptions to its production schedule.
With the change in administration, he said the government is still discussing “internally” whether the program will be extended. He said Trade Secretary Alfredo E. Pascual is still being briefed on the CARS program.
The Toyota executive said the company wants the program to continue because the participants have already invested in it.
TMP and Mitsubishi Motors Philippines Corp. enrolled Vios and Mirage, respectively, in the incentives program.
Gutierrez said the TMP has already received part of the incentives from the
Fixed Investment Support (FIS), one of the two incentive categories under the CARS program.
The FIS is meant for investors that will manufacture parts, establish shared testing facility, deliver parts within a prescribed period set by the Board of Investments (BOI) and introduce an enrolled model to the market using the parts manufactured under the program.
He also said TMP is now working on the Production Volume Incentive (PVI), the other incentive category under the program.
Under this category, he said, “You have to produce the first 100,000 (units). It’s only on the 101st thousand unit that will start receiving (perks). But that covers also the previous, the first 100,000.”
The PVI sets the production volume for parts and vehicles. The fiscal support will come in the form of tax-payment certificates. Program participants can use the certificates in offsetting their tax and duty obligations to the government, specifically excise tax, income tax, import duties and value-added tax.
The CARS program is a government stimulus program aimed at reviving the country’s declining manufacturing sector by specifically targeting the auto industry, given its strong linkages to other industries and its so-called multiplier effect.
The program provides for a government support fund of P27 billion, or a budget of P9 billion for each enrolled vehicle model.
The P9-billion support includes all the incentives that will be availed of by the parts makers, shared service providers and the vehicle assembler.
The CARS program mandates a minimum production goal of 200,000 units for a maximum of six years or the life span of the particular model enrolled.
In April, former Trade Secretary Ramon M. Lopez bared said the CARS program was supposed to cover three participants. The former Trade chief had pushed for the rechanneling of the remaining budget under CARS for the manufacture of electric vehicles (EVs).
Pascual is also pushing for the inclusion of EVs in the CARS program, but he said “fundamental issues” such as the high cost of electricity and fuel need to be addressed.