Car firms seek review of gov’t plan as sales fall

By Jenina P. Ibañez, Reporter

CAR MANUFACTURERS are asking the government to review the conditions of support programs for the sector as the pandemic slows down production.

The government in June said that it had no immediate plan to revise a fiscal support program for automotive companies investing in local production after industry sales slumped due to the pandemic.

Toyota Motor Philippines Corp. and Mitsubishi Motors Philippines Corp. are participating in the Comprehensive Automotive Resurgence Strategy (CARS) program, which offers fiscal support to car companies that locally produce 200,000 units of high-volume car models for six years.

“We are quite concerned about the survival of the auto industry,” Toyota Motor Philippines First Vice-President Rommel R. Gutierrez said in a press conference on Thursday.

Mr. Gutierrez, who is also the president of the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI), said that it is possible that participants in the CARS program will not be able to reach their target volumes.

“On manufacturing, you know the CARS program, it’s ongoing and it’s an industry issue actually because we’re talking of manufacturing here. Because of the slowdown in sales, the local manufacturing, specifically the Vios and the Mirage — these are the models enrolled under the CARS program — also are badly hit,” he said.

“The danger there is that there are commitments under the CARS program that we have to meet and definitely, with all this negative impact on the automotive industry, there is a threat that the participants of CARS program may not be able to achieve the target volume as committed.”

He said that sustaining competitiveness is one of many issues the industry is facing.

“At this time, we think it’s very appropriate that we review the policies and the conditions of government support. We need appropriate assistance and collaboration with the government so that we could maintain local production and at the same time be competitive.”

Car sales saw a 48.7% decline in the seven months to July to 105,583 units compared with the same period a year ago, a joint report by CAMPI and Truck Manufacturers Association  said.

Year to date, commercial vehicle sales dropped 47.6% to 75,514 units, while passenger car sales fell 51.4% to 30,069 units.

Toyota retained its spot as the market leader with 43% market share in July, with sales tumbling 37.4% to 8,833.