CARS is an initiative intended to boost car manufacturing in the country and to prime the country as a regional automotive manufacturing hub. The programme is expected to generate economic activity worth around P300 billion and at least a 1.7 percent growth in national GDP (gross domestic product).
“The government has set a high level of ambition for the CARS programme, targeting the need to promote an economically-viable scale of production that will allow our auto sector to compete within the region for specific auto models,” said trade assistant secretary Rafaelita Aldaba.
Last December, the Board of Investments (BOI) issued the implementing rules and regulations (IRR) for the CARS programme.
According to the BOI, prospective local car assemblers may apply for fiscal support not exceeding P27 billion by locally producing three vehicle models or P9 billion per model. Each participant is given six years to produce 200,000 units each.
The BOI has confirmed both MMPC and TMPC as participants in the programme.
As part of its participation under CARS, Toyota and Mitsubishi are also required to localise the production of body shell and large plastic parts and components. At present, these are all imported, making the local car manufacturing industry uncompetitive.
MMPC is committing P4.3 billion to establish a local production line for its sedan Mirage and Mirage G4 models, which are expected to be operational by early 2017.
This investment by the Japanese automaker also includes a P2 billion stamping facility in Laguna. The plant, which has a capacity of 30,000 units per shift, would be used to produce the large body shells for the hatchback and sedan units of the Mirage. The current assembly plant in Laguna currently produces Mitsubishi’s Adventure and L300 lines.
“Under the CARS programme, our projected production volume is 200,000 units within a period of six years. In order to meet this target volume, MMPC plans to increase its plant’s capacity by adding another work shift,” said MMPC president and CEO Yoshiaki Kato.
“Given that automotive industry associations and economists predict total industry sales will reach the 500,000 units mark by 2020, MMPC hopes to remain one of the country’s partners towards the nation’s economic growth and development,” MMPC said in a statement.
Following a similar move, TMPC is making an initial investment of P3.22 billion starting this year for the manufacturing of its Vios subcompact sedans. Production will begin by 2018 and there are plans to manufacture around 230,000 units within six years.
The CARS programme also calls for new investments in parts manufacturing such as large car body panels, bumpers, instrument panels, headlamps, shock absorbers, plastic fuel tanks, automotive fabric and others.
