Auto firms may not receive incentives under CARS program

The Trade Department said participants in the Comprehensive Automotive Resurgence Strategy program may not qualify for incentives from the government because of the poor demand amid the coronavirus pandemic.

“I guess the participants may not be able to receive variable incentives. There hasn’t been any active talks on that, even as we see them having difficulties for whatever reasons they kept citing,” said Trade Undersecretary Ceferino Rodolfo.

Rodolfo said the department was studying the option to give CARS participants more time to comply with the volume target.

Toyota Motor Philippines Corp. and Mitsubishi Motors Philippines Corp., the only two companies that joined the program, were given six years to produce 200,000 vehicles each for domestic sales in order to qualify for P27 billion worth of fiscal and non-fiscal incentives.

Rodolfo said there were talks, even before the crisis, to reduce the target production volume.

“If at all, we have not considered cutting targets. We will follow what is specified in CARS,” Rodolfo said.

Toyota and Mitsubishi invested P5.4 billion and P5.7 billion, respectively, in the last three years.

Rodolfo said the government was aware of the plight of the automotive industry with Europe announcing a 70-percent decline in vehicle sales.

“We’re pretty sure that there will be huge toll on world car sales and we’re not an exemption to this. Globally, that is the trend. However, we see no immediate need to revise CARS,” he said.

Data show that May 2020 sales fell by 84.6 percent from 30,998 units sold in May 2019.   The industry sold 69,463 units in the first five months, down by 51.1 percent from 142,195 units.