THE Board of Investments (BoI) said it hopes to increase the local-content level for vehicle manufacturers to 60%, citing the need for parts makers to achieve economies of scale.
On the sidelines of the Auto Reverse Trade Fair, BoI Industry Development Services Executive Director Ma. Corazon Halili-Dichosa said the 60% target is aligned with the requirements of the Comprehensive Automotive Resurgence Strategy (CARS) program.
“If we can actually have 60%, at least, of the parts being made in the Philippines, it will be better because that will establish economies of scale for the parts makers, especially if they are common parts suppliers or assemblers,” Ms. Halili-Dichosa told reporters.
She said that between 2015 and 2023, imported vehicles accounted for 71% of the industry’s sales.
“Imagine the foreign exchange savings that we could have had if only we were able to produce more of what the people buy locally,” she added.
She said demand for motorcycles and commercial vehicles has been growing.
“There is a strong (post-pandemic) market for motorcycles… which is also the same for commercial vehicles,” she said.
“It’s better if there are more assemblers and we can increase their localization. What’s good is that our assemblers are very open to local parts manufacturing. Either they do joint ventures or they have domestic suppliers,” she added.
However, she said the 60% local-content goal for vehicle manufacturing will be hard to achieve as localization levels vary from one vehicle to another.
“If we are talking about commercial vehicles, it is harder compared to [passenger] cars because they already have a foundation due to the CARS program,” she added, referring to the Comprehensive Automotive Resurgence Strategy, an incentive program encouraging domestic assembly. — Justine Irish D. Tabile