MVPMAP

 

Brand new cars at second-hand prices

 

By Ronnel W. Domingo

 

A group of local auto parts makers called on the government and other members of the automotive sector to revive the people's car program amid a continued downturn in the parts sector.

 

Feliciano Torres, chair emeritus of the Motor Vehicle Parts Manufacturers Association of the Philippines, said in a statement the sector needed a boost considering that the assembly of completely-knocked down kits had been shrinking as importation of completely built units had been rising.

 

The assembly of CKD kits is the main driver of MVPMAP members' business, as this requires the use of local automotive parts.

 

Torres said that the automotive parts industry's performance peaked in 1996 when 141,000 CKDs were assembled and sold locally. This accounted for 87 percent of the total 162,000 vehicle units sold by the industry that year.

 

He said the following years saw a downtrend, with CKD units accounting for only 59 percent of the 97,000 vehicle units sold in 2005.

 

MVPMAP data show that CBU sales have grown from only 8,200 units in 1998 to 39,500 units in 2005.

At the same time, Torres said sales growth over the past eight years had been flat.

 

"What is hurting the local parts makers the most is the steady rise of CBU sales and the shrinking of the CKD sales in a vehicle market that is not growing," he said.

 

Torres clarified that an uptrend in CBU importation was not bad provided it did not cause the downtrend in the local assembly of CKDs.

 

"We were expecting to benefit from what was originally planned by the government under the 2004-2007 Automotive Industry Program which envisions sales of CKDs to hit 200,000 and CBUs to 100,000 units by 2007," he said.

 

"A year away, industry sales are still only about a third of that level," he added. "The Philippine vehicle industry has in fact been overtaken and left behind by its neighbors in Southeast Asia."

 

He said the answer could lie in the promotion of a second version of the people's car program, which would involve the development of a brand new vehicle at the price of a second-hand car but with a high level of local content.

 

"This brings to fore images of the updated 21st century versions of the affordable and highly-successful Asian Utility Vehicles (AUV) - the Ford Fiera, Toyota Tamaraw, Isuzu KC20 and Nissan Bida," he said.

 

Also, Torres said parts makers were calling on local car assemblers to take the lead in designing and developing the new people's car, "incorporating whatever parts the local manufacturers can possibly supply that conforms to the assemblers' quality, cost and delivery requirements."

 

As for government support, Torres said MVPMAP was seeking more assistance, protection from incentives. The industry, he said, specifically wanted the importation of used vehicles stopped.

 

(Source: Philippine Daily Inquirer, 31 July 2006)

 

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