Automotive parts industry stakeholders are optimistic that a proposed industry roadmap projecting more than half a million cars produced locally in 10 years' time is doable.
“The roadmap shows that starting this year and for the next 10 years until 2022, local auto production from CKD [complete knock-down] kits will increase by about 15 percent annually, starting with 90,000 units this year 2013 to 350,000 units by 2022," Motor Vehicle Parts Manufacturers Association of the Philippines group president Ferdi Raquelsantos said in a statement.
"We may also start exporting our completely-built units [CBU] by 2015 beginning with a modest 12,000 units that is expected to grow to 156,000 units by 2022. So, by 2022, we are expected to be producing around 506,000 units, the very first time we will breach the half-million mark," he added.
The Philippines lags behind its ASEAN neighbors in terms of production, said Raquelsantos.
“We locally produced only about 65,000 units [in 2011],” he said. “This pales in comparison with regional leader Thailand’s 1.56 million units, Indonesia’s 838,000 units and Malaysia’s 534,000 units. Even the new kid on the block Vietnam has surpassed us with 100,000 units.”
Under the roadmap, which will be presented this month to the Board of Investments, production output is slated to grow to 213,000 units; domestic CKD sales to reach 195,000 units; localization levels of more than 40 percent; exports to hit 18,000 units; and parts exports to increase to $4.8 billion.
By 2022, production is projected to hit 506,000 units, of which 350,000 are domestic CKD units and 156,000 are exports; and parts exports to reach $7 billion.
Raquelsantos added that the industry must bring down the coast of locally producing a verhicle, which at $1,800 per unit is 14 percent higher than in other ASEAN countries. “This is where we immediately need government support in terms of viable incentives in a rehabilitated Motor Vehicle Development Program, reduction in VAT and excise taxes, tax credits for CBU and parts exports and the liberalization of investment hurdles," he said.
The auto manufacturing industry's output value of P368 billion makes up 12 percent of the industrial sector's output value and 3.8 percent of the country's total GDP.
(Source: BM, GMA News)