THE Comprehensive Automo-tive Resurgence Strategy (CARS) Program will be implemented as planned and the Department of Trade and Industry (DTI) won’t change the rules just to entice new players to participate in the manufacturing stimulus program.
“We won’t change the rules in the middle of the game. We’re not considering setting different requirements for the third slot. There are others who can vie for it,” Trade Secretary Ramon M. Lopez told the BusinessMirror.
The DTI is spearheading CARS, the automotive manufacturing-stimulus program that comes with P27 billion worth of the government support. The program requires the manufacture of three models of a four-wheeled vehicle with a budget of P9 billion each.
Toyota Motors Philippines Corp. and Mitsubishi Motors Philippines Corp. have been duly registered as participating carmakers (PCM) in the CARS Program.
Toyota and Mitsubishi were deemed as the two eligible candidates to the CARS, considering the program’s “high standards,” including the required 200,000 units to be produced in six years under the program.
With the ambitious requirements, other carmakers were discouraged from joining the program, because they have not reached the economies of scale needed to meet the production hurdle.
Former DTI chiefs Adrian S. Cristobal Jr. and Gregory L. Domingo earlier said they were only entertaining “serious” players that could meet the program’s standards.
As such, the question of a third model still hangs.
Volkswagen, one of the world’s largest automakers, also expressed interest in investing in the Philippines last year to join CARS. But it was discouraged by the stiff production volume requirements.
As Volkswagen has no local assembly plant in the country and will be starting production from the ground, company officials said the production requirement is impossible to meet, especially for a new entrant. The German car firm withdrew its bid last year, and along with it, $200 million in potential investments.
In a separate text message, Trade Undersecretary Ceferino S. Rodolfo said Toyota and Mitsubishi have not stepped up to apply for the third slot, and there has been no other carmaker that has submitted an application.