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Discussions to extend CARS program ongoing

A PROPOSED extension to the Comprehensive Automotive Resurgence Strategy (CARS) program is currently being discussed, according to the Department of Trade and Industry.

Ceferino S. Rodolfo, Trade undersecretary and Board of Investments (BoI) managing head, told reporters in a recent briefing that the two CARS participants, Toyota Motor Philippines Corp. and Mitsubishi Motors Philippines Corp., are still completing their proposals for an extension.

The BoI is the implementing agency of the CARS program, which provides incentives for manufacturers willing to assemble mass-market cars domestically.

“There is no (final proposal) yet but we are working on that. Trade Secretary Alfredo E. Pascual has met with the two CARS program participants (to determine) how much longer do they need so that they can be given a reasonable extension,” Mr. Rodolfo said.

“The two participants are still finalizing their offer for us. They suffered severely in terms of volume due to the coronavirus disease 2019 (COVID-19) pandemic,” he added.

Mr. Rodolfo said there are ongoing discussions to add more models into the CARS program as a possible stipulation in exchange for an extension, possibly for three years.

“If we extend, what would we get in return? For example, do we include additional models in the program? That is still under discussion. The CARS program participants already put in the fixed investments. It’s not just the two registered participants. It also includes their parts suppliers,” Mr. Rodolfo said.

Mr. Rodolfo added that there would be no additional funding for the CARS program even if an extension is agreed.

“The previous discussion (was about extending) the CARS program for three years across the board for the two participants without additional increases in the budget allotted for them,” Mr. Rodolfo said.

The program has a P27-billion budget for three car manufacturers to produce 200,000 units each for a six-year period in order to avail of fiscal incentives.

However, only Toyota and Mitsubishi joined the program.

Toyota produces the Vios compact car while Mitsubishi produces the Mirage model.

Toyota has until 2024 to meet its commitments while Mitsubishi’s deadline is 2023.

Mr. Rodolfo said the proposal to give the third slot in the CARS program to an electric vehicle (EV) manufacturer has been largely ruled out. 

“I am not expecting (a third participant) because this CARS program has been around for a long time,” Mr. Rodolfo said.

“The discussions on the third CARS slot will have to be consistent with Republic Act No. 11697 or the Electric Vehicle Industry Development Act (EVIDA),” he added.

Under EVIDA, the government and companies are required to meet a 5% EV quota for their vehicle fleets.

In the first 10 months of 2022, the auto industry has sold 280,300 units, up 30.9% from a year earlier, according to a joint report of the Chamber of Automotive Manufacturers of the Philippines, Inc. and Truck Manufacturers Association. — Revin Mikhael D. Ochave

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