Carmakers call for gov’t support on local assembly

assembly line

By Jenina P. Ibanez, Reporter

A CAR industry group is urging the government to support local assembly after another manufacturer stopped its Philippine production.

Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) President Rommel R. Gutierrez said that Nissan Philippines, Inc.’s recent announcement to end car assembly in the country highlights the importance of government support to local production while still allowing for imports.

“The rationalization of production operations in the Asian region takes into account the competitiveness of local operation,” he said in a mobile message on Friday.

“The remaining local assemblers need more support to stay competitive without undermining regional complementation on supply chain, among others.”

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Nissan Philippines will be stopping local assembly of its Almera vehicles in March, laying off 133 employees. Honda Cars Philippines, Inc. shut its local assembly activities last year.

Both firms will continue to sell cars in the Philippines through their regional networks.

Trade Secretary Ramon M. Lopez had said that the recent closures are proof of the need for the recently imposed safeguard duties on imported cars, which had been placed after the Trade department’s investigation confirmed a link between a surge in imports and a decline in local automotive jobs.

CAMPI had pushed back against the measure, saying that it would impede the recovery of an industry hit hard by a demand slowdown caused by the lockdown. But the Trade department had countered that the move would protect local jobs.

Mr. Gutierrez said that there should be a balance between assembling completely knocked down (CKD) cars and importing completely built up (CBU) units for the survival of local assembly.

“CKD operation cannot survive without a combination of CBU importation,” he said.

“The industry and government should work together towards a more progressive policy to preserve the remaining local vehicle assembly/manufacturing in the Philippines.”

Workers group Philippine Metalworkers Alliance, which had petitioned for the safeguards, said in a recent statement that the duties are not enough to save the industry. The group said that the government must revisit its car industry development program and address the high costs of power and transportation.

Car sales in the Philippines declined by 39.5% to 223,793 units in 2020 compared with the previous year after restrictions declared to contain the coronavirus disease 2019 (COVID-19) pandemic lowered demand, data from CAMPI and the Truck Manufacturers Association showed.

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