CARS Program to close cost gap in auto production

The Comprehensive Automotive Resurgence Strategy (CARS) Program will make production of automotive vehicles in the country more competitive by closing manufacturing cost gap, Department of Trade and Industry (DTI) Assistant Secretary Rafaelita M. Aldaba said.

Aldaba, during the Regional Supply Chain Readiness Training for Automotive Sector on Friday, said that manufacturing cost of automotive vehicles is higher in the Philippines as importing of car parts share the largest in the total production cost.

Car manufacturing in the Philippines is costly by around USD1,500 to USD1,800 compared to Thailand.

Cost of imported car parts here share 61 percent of the total cost — 49 percent from ASEAN and 12 percent from Japan.

Cost of local components contribute 23 percent while assembly cost at 16 percent.

Compared to Thailand, Aldaba said, local components’ share to the total production cost is at 67 percent while cost of imports only at 20 percent and assembly cost at 13 percent.

“That’s actually our target: to close the production cost gap and make our local manufacturing more competitive,” said Aldaba.

The CARS Program aims to boost assembly and sales of automotive vehicles in the domestic market through performance-based fiscal and non-fiscal incentives from the government.

It targets to attract investments, particularly the manufacture of parts that are not yet available in the local market as well as bringing in technology and testing facilities crucial for the growth of the local industry. (PNA) FPV/KMC