Welcome to Inquirer Mobility

The beginning of the six-year term of a new President naturally creates questions about what impact his administration will have on the automotive industry. The auto industry, after all, plays a major role in the country’s economic development.
To get an idea of what some auto industry leaders hope for and expect, PDI Motoring sent them 3 questions:
1)    What do you hope for the automotive industry under the Ferdinand “Bongbong” Romualdez Marcos, Jr. administration?
2)    The administration of Bongbong Marcos’s father, Ferdinand Edralin Marcos, initiated the Progressive Car Manufacturing Program (PCMP) but it was discontinued by the succeeding administration. Would you welcome an un updated version of the PCMP?
3)    What advice re the auto industry would you offer the new heads of the Department of Trade & Industry (DTI) and the Department of Transportation (DOTR), if your advice is asked?
Here are the answers of selected industry leaders:

VINCE S. SOCCO, GT Capital Auto & Mobility Chairman, Toyota Motor PH Director & Board Member
1)    We are hopeful that the new administration will include in its priorities the further.
strengthening of mobility across the country. This includes continuing with infrastructure development projects to connect the entire archipelago as well as integrating local production of motor vehicles into the national manufacturing blueprint of the country. A vibrant manufacturing sector – of which the auto industry is usually a vital part – is crucial to sustainable economic growth. The fact that the country is at the cusp of motorization means that we should secure our supply chain and increase self-sufficiency.

2)    The Motor Vehicle Development Program (MVDP) remains in place. It was supplemented by the Comprehensive Automotive Resurgence Strategy (CARS) program. Toyota aims to fulfill its commitments under CARS and has already produced 100,000 units of the Vios at the end of 2021. Under the CREATE law, we hope that the government can continue to support local production including component parts manufacturing and exports. The aim is to integrate the Philippines into the global supply chain. The multiplier effect of the auto industry contributes significantly to economic growth. Given the large and young population of the country, the demand for motor vehicles is expected to climb. A certain level of economically sustainable local production – particularly models that support MSME’s and the public transport sector – is, perhaps, ideal for us to realize increased employment, reduced foreign exchange requirements and the strengthening of our manufacturing capability.
3)    The auto sector has always been a partner of government in its agenda of nation building.
In particular, we are a strategic industry cluster that provides significant jobs, revenues and the transfer of technology. As the country continues to develop, mobility becomes a critical enabler of growth. Motor vehicles are essential products for economic activity, especially for MSME’s. In addition, private ownership of motor vehicles is a proxy for public transportation. We hope we can strengthen our dialogue with the DTI on how best to balance the supply chain of motor vehicles between CBU and CKD models to meet the growing mobility needs of the country. In addition, we would like to explore new mobility solutions with the DOTR that can help rationalize the private and public transport sector. Being able to improve safety and efficiency of the transport system to global standards is a shared goal. We also hope to help in the development of innovative solutions towards mobility as a service.

ANTONIO “TOTI” ZARA III, AC Motors Automobile Group president:
1.    The industry is now at another critical cross roads, this time on accelerating the adoption of electric vehicles in the Philippine market. The EV bill has been signed but provides only broad objectives and goals. It is a good first step nonetheless. Next is for the government to define the detailed implementing guidelines critical for us in the industry to finalize our introduction plans. Less barriers on importation of CBU’s will allow us to make pricing more competitive to stimulate early adapters. We need this first small step to better understand what it will take to complete the full transformation towards electrified mobility.
2.    We don’t need another car manufacturing program in the Philippines. The last time we
tried was with CARS which is the latest reincarnation of the original PCMP. Maybe we can blame the current challenges of the CARS program participants on the pandemic, or on many other potential reasons. The fact, however, is that we are too far behind to compete head-on against the regional auto giants – Thailand, Indonesia, Korea and the recent entry of China with new free trade agreements coming into play. If we are to go into manufacturing, let’s define a segment niche we can own. Let’s not compete in the traditional segments like MVPs, passenger cars and pickups. Certain commercial segments provide us that opportunity.
3.    The auto industry remains to be an important sector that will drive our economy. It is going through a critical transition as brands shift their focus to EVs and mobility in general. This applies to the transport of passengers but also in the transport of goods. We want to anticipate the needs of the shifting marketplace so we can adapt to new technologies that can be made available to the Philippine consumer.
    Like in all other industries, the auto industry needs clear direction and consistency in government policy. One area that remains unclear is the need for periodic vehicle inspection. We cannot compromise on road safety and must implement only the strictest of inspection standards as a prerequisite for registration. At the same time, we need to make inspection more accessible by accrediting additional inspection centers, including certifying existing service workshops that meet DOTR requirements.
    Various government agencies will also need to take a look at the used car sector, a significant source of revenues for government if it can be better regulated. It remains an informal sector because of loopholes in lax policies which prevents formal organizations from fully developing its potential.

MANNY ALIGADA, Kia PH president:
1.    The automotive industry experienced phenomenal growth before the pandemic. But the last two years presented major challenges to all brands. Fortunately, now that we are gradually easing out of this global health crisis, the industry is picking up where it left off. However, many things have changed in terms of mobility requirements as there are now other considerations: (1) strong demand for individual and public transportation for health and safety considerations, (2) available developing technologies such as electric vehicles and its ecosystem, (3) the growing need for vehicles for logistics and delivery services, and (4) the current situation of surging oil prices. With these, government policies should be adjusted to make car ownership, including use of electric vehicles, more accessible and sustainable to the majority of the Filipino people. The government should also revisit and review appropriate programs given the expansion of manufacturing capabilities in other countries in Asia.

2.    Kia Philippines supports government programs and partnerships that would contribute to progress, innovation, and economic stability to support the Filipino people and elevate us competitively onto the global stage. Government should reassess the overall need of the business community as well as the riding public to take advantage of manufacturing capabilities for some automotive segments so direct foreign investments can come in, leading to employment and a better economy. A review of the current programs that would enable practical and updated applications will spur manufacturing and its impact on other related industries.
3.    The previous administrations have provided usable blueprints and templates for the current administration to build upon and improve the country’s transportation and infrastructure systems. But due to changing mobility requirements, government policies should be adjusted in the upcoming programs. In line with these, we can suggest the need to review various programs to meet the mobility requirements in terms of executions among the following: (1) ride-sharing platforms, (2) PUV modernization program, (3) upcoming technologies like electric vehicles, and (4) evolving car ownership models.

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