No SUVs, only peoples’ cars for gov’t use

The economic geniuses in the palace by the Pasig River were so excited they didn’t even clarify whether their target is 600,000 Philippine-made automotive vehicles per year or 100,000 units a year in a six-year period.   We are talking here of the Comprehensive Automotive Resurgence Strategy (CARS) Program which Malacañang recently approved to provide “local car manufacturers” a total of US$600 million worth of incentives from 2016 to 2021.

But even a target of producing 100,000 automobiles a year may be a pipe dream. First off, we don’t really have a local car manufacturing sector that builds vehicles from scratch. What we have are mere assemblers of knocked-down units and some plants that machine some minor parts.  Secondly, granting that we are able to produce 100,000 units per year, would the three models being envisioned by the government be competitive enough in the cutthroat local and international market?

With the incentives, would the locally produced units be attractive to consumers price-wise considering that the imported CBUs (completely built units) that flood the local market are sold cheaply because their already well-entrenched manufacturers in Thailand, Japan and South Korea, just to cite a few, are enjoying distinct advantages like economy of scale?

Mind you, only a total of 234,747 automotive units were sold in 2014 in the Philippines and that’s already a banner year compared to the 181,283 units sold in 2013, based on data culled by the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and Truck Manufacturers Association (TMA). So the question now is, what happens to the unsold Philippine-made vehicles?  If there are few takers for them locally, how can we expect to even export them?

That pessimism aside, our proposal is for the government to enforce a moratorium on the purchase by any and all government departments, agencies, instrumentalities and corporations of imported brand-name vehicles. Let government serve as the niche or captive market for Philippine-made vehicles until such time that our    local car manufacturing sector can really stand on its own and compete against the giants.

The geniuses haven’t thought of this, or maybe they just don’t want to let go of the red-plated, gas-guzzling, road-hogging sports utility and luxury vehicles that they use as part of the perks of being in power.  Let us produce peoples’ cars and let all government agencies and officials be the first to patronize them.  -end-                                          

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