President Ferdinand R. Marcos Jr. has approved the 5-year extension of the Comprehensive Automotive Resurgence Strategy (CARS), which is aimed at expanding the Philippine automotive industry, the Private Sector Advisory Council (PSAC) said.
In a statement on Friday, PSAC said “the extension of CARS for 5 years will continue to provide incentives and support for manufacturers that meet specific requirements in terms of investment, production, and technology development.”
“CARS will also continue to provide significant employment opportunities as well as the foundation for the future development of the economy,” it added.
The CARS program, introduced through the issuance of Executive Order No. 182 in 2015, gave participating automakers six years to reach the minimum volume target sales of 200,000 domestically produced automobiles for each of the enrolled car types in order to qualify for incentives.
Mitsubishi enrolled the Mirage G4, while Toyota enrolled its Vios model in the incentives program, which is set to expire in 2024.
The Board of Investments (BOI) said in December 2022 that Mitsubishi started its production in February 2018, while Toyota started in July 2018.
“CARS has demonstrated its effectiveness and value as a high-end manufacturing operation which has greatly helped in the creation of jobs, transfer technology, and boost global competitiveness by supporting domestic auto manufacturing and stimulating investment,” PSAC said.
In fact, BOI noted in December 2022 that Mitsubishi employed 35,696 people, while Toyota created 74,353 jobs, including those in parts making and the provision of ancillary services.
The agency attached to the Department of Trade and Industry (DTI) earlier said investments in the CARS program have reached P9.6 billion. It has also resulted in $1.01-billion foreign exchange savings.
Net government revenues amounted to P18.77 billion based on a 6-year model life, according to the agency.
When talks on the extension of CARS program were still ongoing, the BOI said the program generated “new capabilities” in big volume parts particularly in the body shell and in large plastics, which the agency said is a “key contributor” to the high import logistics cost of complete knock-down (CKD) manufacturing.
Toyota Motor Philippines First Vice President and Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI) President Rommel R. Gutierrez said in August 2022 that the CARS program has to be extended until 2027 so it can achieve the objectives of the program.
Meanwhile, PSAC said it introduced a new recommendation, which further supports MSME development, the Motorcycle Micro Business Program.
While waiting for the passage of the law, PSAC said it is seeking for a nationwide expansion via an executive order which aims to create over 2 million jobs for “habal-habal” riders and provide access to transform their livelihoods, becoming a platform for self-entrepreneurs.