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  1. Join Date
    Sep 2008
    Posts
    185
    #1
    Business Mirror
    November 7, 2008


    [SIZE=3]Support for Local Auto Assembly Industry Pushed[/SIZE]
    by Butch Fernandez/reporter




    The government must effect drastic policy shifts if the ailing Philippine automotive-assembly industry is to be revived, according to Sen. Loren Legarda.


    In a statement, Legarda expressed her concern over the growing number of vehicles the country imports each year vis-à-vis the number of locally assembled vehicles it exports.


    She cited data used by a top official of Ford Group Philippines in lamenting the sorry state of the local automotive-assembly sector.


    “The Philippines used to be an assembly hub of vehicles for export to other nations. But not anymore,” Legarda lamented, adding that “the number of CBU [completely built unit] imports does not lie.”


    The senator pointed to data from the Bureau of Export and Trade Promotion as cited by Ford that Philippine CBU imports went up to 460,000 units while exports declined substantially to 90,000 in 2006.


    She recalled that in 2005, the country’s CBU imports surged to 310,000 units from 230,000 units in 2003 and 2004. In contrast, Philippine CBU exports improved only slightly to 170,000 units in 2005 from 150,000 units the previous year.


    “These numbers must translate to massive job losses in the local automotive-assembly industry,” Legarda said. “It is sad because a few decades back, the Philippines was looking forward to becoming a complete automotive-assembly hub by aspiring to build vehicles from scratch or from raw materials such as steel, instead of just assembling them from knocked-down parts coming from abroad.”


    She added that a study by Frost & Sullivan on the Philippine automotive industry said that market liberalization has made CBUs more attractive to sellers and buyers compared with locally assembled and manufactured vehicles.


    It pointed out that liberalization of the automotive industry will make some vehicle assemblers and component manufacturers redundant.
    The government should support local assemblers of vehicles in the Philippines in order to save thousands of jobs and employment in the country...

    CBUs should be taxed heavily to discourage importation and help existing assemblers to survive..

    Do you think its a good proposition?

  2. Join Date
    Aug 2005
    Posts
    7,186
    #2
    It will be too expensive for local manufacturers to set up their plant to manufacture all kinds/type of cars they are selling. They have to go CBU to save on cost.

    The PH market is still too small.

    Ang dapat i-bawal ay ang importation ng mga 2nd hand vehicles lalo na iyong i-convert pa mula sa right hand drive. IMHO.

  3. Join Date
    Nov 2005
    Posts
    45,927
    #3
    mas madali mag import ng buo kesa mag assemble

    mas cost effective

    you need to employ more people for assembling

    more people = more chances of KMU infiltration = welga

    Car companies here already got burned by that before

  4. Join Date
    Aug 2005
    Posts
    7,186
    #4
    We can have the car manufacturers located at PEZA sites para they have the tax perks. Iyon lnag nga the bulk of the produce will be for export. If I remember correctly, 10% lang ang limit for local sales.

    Sa PEZA sites, wala yata or bawal ang welga.

  5. Join Date
    Aug 2004
    Posts
    22,705
    #5
    I remember that... I even know a few who lost their (high-paying, high-perks) jobs, who are lamenting ever joining that stupid union.

    ----

    The problem really, is that in the interest of spurring free trade, we've already signed into the South-East Asian pact that makes CBUs from Thailand and Indonesia (much bigger markets than us) cheaper.

    CBUs from outside are already heavily taxed... ever wonder why Kia and Hyundai products are so expensive?

    As for secondhands? I can't really agree with that. While it is hurting the industry, a blanket ban on secondhand imports strains the bounds of constitutionality. Instead, what the Government should focus on is collecting the proper taxes for surplus imports, and imposing a very, very stringent road-worthiness inspection on secondhand imports. if they don't meet road-worthiness requirements for the Philippines, the government confiscates them and sells them for scrap.

    Taxes won't help local assemblers... they'll just help the local multinationals gain a small percentage of market share. What will help local small-scale assemblers is government support and standardization of local, indigenous designs like the Jeepney, the tricycle and the XLT. With manufacturing standards comes common chassis parts, which opens up opportunities for local factories to mass-produce parts such as bumpers, doors, roofs, etcetera... bringing assembly costs down... in fact, coordination might even make it possible for us to locally assemble a line of engines... say, a common 2.5 liter diesel for Jeepneys, XLTs and light trucks and a common 1 liter or smaller engine for whatever will replace tricycles in the city.

    Ang pagbalik ng comeback...

  6. Join Date
    Sep 2008
    Posts
    1,219
    #6
    Quote Originally Posted by uls View Post
    mas madali mag import ng buo kesa mag assemble

    mas cost effective

    you need to employ more people for assembling

    more people = more chances of KMU infiltration = welga

    Car companies here already got burned by that before
    yan nang masakit na katotohonan dito sa bansa natin, welga dito welga doon....
    pero baket halos pareho lang ang price ng CBU vs sa locally assembled?

  7. Join Date
    Jun 2007
    Posts
    2,854
    #7
    The government should amend the law government Freeports in order to strengthen the E.O. banning the sale of imported CBU outside these areas....

    Th government can find alot of ways to discourage the proliferation of CBUs in the Philippines...

    I say tax to death all imported CBUs with no local value added.

    We can be another Thailand in auto manufacturing if we do the right
    thing.

    This time, I agree with Ford Motor Philippines that Ford/Mazda Philippines, Toyota, Mitsubishi, Isuzu and UMC should be supported by the government especially if their operation will focus more on the CKD assembly...

    Local native assemblers also should be given incentives...

    As an advocate of local auto industry development, I believe the government should encourage local assemblers here to revive the idea of joining forces and produce certain local auto components for the local industry (I remember the proposal develop a common engine or a 70 percent local component AUV i.e. Toyota Tamaraw FX is almost 65% local) ...

    Sana, 2010 na para wala na ang walng dereksyong administrasyon ni PGMA...

    Puro pasakit sa local and even foreign businessmen...

    Heyday ng importers ang PGMA administation...

    And I join Ford and Toyota with their grief that this government is nothing more but a loose cannon.

  8. Join Date
    Aug 2004
    Posts
    22,705
    #8
    We can tax them... but not really "tax them to death". The reason for low prices for some CBU vehicles here is because the government lowered the tax on non-luxury vehicles here, to make economy vehicles more affordable to the public.

    Besides... high taxes will not really spur productivity that much... what we need is local vehicles that are affordable. Malaysia went that way, and it worked only because they had a large enough market to support a local manufacturer. Our local market can't support the manufacture of anything but commercial vehicles. And tax protectionism is a double-edged sword... Proton was okay initially... but the lack of competition and incentive meant that they had locally-made components that really weren't world class in quality... which made them uncompetitive outside of the Malaysian market.

    Would you make it so that Filipino buyers could only buy Chinese-quality (or worse) vehicles? Would we support the local auto-industry this way at the expense of commercial users, businesses and entrepreneurs who are denied the availability of reliable and safe working machinery?

    Instead of concentrating on "taxing" CBUs "to death"... I would restructure the tax and use the earnings from the tax to subsidize local manufacture... to pay for local development of powertrains and suspensions (the biggest hurdle in local manufacturing) to make locally assembled vehicles better and more competitive products.

    Remember, we should not only support our local industry, but we should also assure that our local consumer base is well-served by that industry. It's only by pushing local industry to create a product that local (and hopefully overseas) consumers will be happy to buy that we can ensure that everyone wins.

    Ang pagbalik ng comeback...

  9. Join Date
    Sep 2008
    Posts
    185
    #9
    Quote Originally Posted by actor21 View Post
    yan nang masakit na katotohonan dito sa bansa natin, welga dito welga doon....
    pero baket halos pareho lang ang price ng CBU vs sa locally assembled?

    The tariff rates on CBU and CKD has become almost the same. Japan is also using low cost Thailand and Indonesia to bring CBUs to the Philippines...

    So the idea is to put not tariff barriers (tax incentives for instance) in favor of CKD or even full manufacturing of local vehicles in the Philippines...

    AUVs were so popular before that small Pinoy assemblers joined the fray because tax on AUV is very favorable to the type of vehicle..


    We have to remember, Pinoys love to buy multi-purpose vehicles..

    The short-lived popularity and huge success of those flying coffins from SUVic and oher ports attest to the popularity of multi-purpose vehicles...

    So for me, tax to death all CBUs and support CKD operations of local assemblers..

    Nissan (UMC: Urban), Mitsubishi (Adventure, L300 Versa Van), Toyota (FX, REvo, Innova), Isuzu (Crosswind) are very popular locally asssembled vehicles..

    I suggest Ford bring back it Ford Fiera to reach out to many Pinoys..

  10. Join Date
    Jun 2007
    Posts
    2,854
    #10
    The government should lead the way in helping our local auto industry.

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