The Philippine auto industry achieved its target of 200,000 units of brand new vehicles sold in 2012. Most car companies rolled out quality small vehicles that looked sporty, offered 15% better fuel economy, built with cutting-edge computer technology, with interiors designed for comfort and a quieter experience and some were even equipped with wi-fi routers. Gearboxes with six speeds, or a CVT have now become the minimum standard.
However, the auto-manufacturing business in the Philippines is in a shaky position. Ford has decided to close its assembly plant in 2013, despite the export of 80,000 completely built vehicles. A complete lack of direction for the development of Philippine auto-manufacturing was cited as the reason for closure.
The free trade agreements within ASEAN nations and with Japan favor importation of cars, rather than local assembly. Countries with a large domestic demand, such as Thailand and Indonesia, already enjoy the economy of scale advantage. After successfully meeting its goal to become the “Detroit of Asia” with its pick-up truck program, Thailand is now moving on to eco-cars, with the goal of exporting cars to other countries.
The direction in the Philippines seems to be merely to import and sell cars, rather than to assemble them locally. But with a population of 90 million, the country needs a robust auto industry. The sector provides opportunities for businesses that can serve the automakers, as well as create thousands of job opportunities. Reliable industry sources say it can be done with more strategic focus and formulation of consistent policy and implementation. The local government units (LGUs) can play an important role to build confidence and a stable environment by:
•ensuring peace and order
•simplifying business processes, such as permits and licenses with transparency
•providing infrastructure such as sufficient, well maintained roads
•implementing an efficient traffic and waste disposal management system
•providing sufficient and good quality water supply
•making available safe and reliable public transport
•providing skilled workers which the government can support with effective skills training programs
•putting in place taxes and incentives that are stable, predictable and transparent (December 26, 2012)