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Japan auto firms rue delay in industry roadmap in Philippines

Publication Date : 07-04-2014

 

Japanese automotive firms may consider relocating their Philippine operations to neighbouring countries if the government is unable to issue the much-awaited roadmap that will outline the strategic direction, policies and new incentives needed to make the automotive industry more competitive.

Takashi Ishigami, president of the Japanese Chamber of Commerce and Industry of the Philippines Inc. (JCCIPI), said in an interview that they have long been waiting for the issuance for this automotive roadmap, which was supposed to have been released by the Philippine government in October last year.

“All of [the] Japanese automotive manufactures are interested in this roadmap. If this is favourable to them, they can expand their production capacity in this country. But if not, they will get out from this country like [the] Americans,” Ishigami told the Inquirer.

“If announcement is delayed further, Japanese manufacturers will give up their production in the Philippines and they are going to other countries like Thailand and Indonesia. As a result, you should import most of cars from overseas and you lost an opportunity to create jobs in this country even though you have a big wave of motorisation,” Ishigami further warned.

The automotive roadmap was earlier targeted for release in the first quarter this year but the Department of Trade and Industry continues to “fine-tune” the details, as requested by the economic cluster of the Cabinet.

Cabinet Secretary Jose Rene D. Almendras said in an interview last month that the “question of the President was more on the details [of the automotive roadmap].

“We don’t want to create a subsidised environment. If we’re going to [come up with] something, it has to make firms competitive,” Almendras explained. “My view was that there was a need to refine certain things as there were programs wherein the government will buy vehicles on certain conditions. There were details that needed to be [threshed out]. The Department of Finance is also of the view that you don’t give out [income tax] holidays but rather give a push on the other side.”

Last month, Trade Secretary Gregory L. Domingo announced that four foreign automotive firms were considering setting up assembly operations in the country, even as the government has yet to issue a new roadmap.

If the proposed projects would push through, these would entail investments of at least “several hundred millions of dollars” for each facility. 

“Hopefully these companies will no longer wait for the issuance of the automotive roadmap. I think there may be others who will not wait for it anymore. These companies are here because of the strength of the economy,” Domingo said.

 

 

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