MVPMAP

 

Auto parts makers push benchmarking

 

Local automotive parts makers are asking for more government support such as incentives similar to those given by the respective governments of their ASEAN counterparts.

 

The parts makers said they are pinning their hopes on a Philippine Utility Vehicle (PhUV) program to increase sales volume through the localization of assemblers.

 

The Motor Vehicle Parts Manufacturers Association of the Philippines (MVPMAP) said the industry supports some 28,000 workers.

 

"If the government hopes to come up with an auto industry development program that will finally work, it has to look at what our ASEAN neighbors have been doing," MVPMAP said in a statement.

 

The group said Thailand, which is the biggest auto assembler and market in ASEAN and is second largest pickup truck market after the United States, succeeded in being the truck capital of Asia through government support.

 

THe Thai government granted a wide array of incentives, including a government tax of only 3 percent. To reduce selling price and spur sales, it reduced excise tax.

 

MVPMAP added that more widespread credit availability also helped boost demand in Thailand.

 

Thailand also developed and extensive supporting network of auto parts manufacturers so parts will not have to be imported. With over 700 original equipment manufactures auto parts suppliers and 1,000 in supporting industries that together employ more than 217,000 workers.

 

The group said Thailand enjoys the reputation for having a strong supply base after its government attracted high-level parts suppliers by offering "priority activity" status to investments in identified key components.

 

This confers on the investor an eight-year tax holiday, duty-free machinery, visa and work permit support and land ownership rights. It then gave maximum incentives to activities, such as research and development, human resource development and design activities that support the auto sector.

 

To further cement its title as the "Detroit of Asia", Thailand Automotive Institute embarked on $218 million program to develop five key projects: HRD, auto experts dispatching program, establishment of R&D centers, auto parts testing centers and car-testing tracks, an information technology center and an auto export promotion center.

 

To broaden its auto industry base beyond the pickup market, Thailand will soon implement a "Best Little Car" project.

 

The group said Thailand has annual production volume in excess of 700,000 units and has hit the one million mark last year, with about 38 percent of these exported. It has decided early on to focus on the pickup truck as a niche market which now makes up 72 percent of total production.

 

Thailand serves as the regional production hub of several automotive companies. Even cheaper sports utility vehicles and its variants are available out of Thailand because of the use of a common pickup truck platform and power train.

 

MVPMAP said through its National Car Program, Malaysia has a vibrant auto industry that chums out 546,000 vehicles per year, making it the second biggest ASEAN car market. Proton and Perodua are Malaysia's national cars.

 

MVPMAP said its car parts suppliers all enjoy cuts in income and other taxes. As a result, jobs are generated and Malaysian cars were able to break into the international market.

 

Malaysia also supports its car parts makers by imposing higher taxes on importation of car parts and creating a mandatory standards for foreign products. It has even gone to the extent of challenging the World Trade Organization by imposing a series of non-tariff barriers on car imports.

 

The MVPMAP said although it did cut tariff for completely built-up (CBU) vehicles from 20 percent to 5 percent, it imposed that for an importer to avail of this, it has to be owned 70 percent by either the government of Bumiputera.

 

 

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