Rival automakers stall Ford's comeback bid

Rival automakers stall Ford's comeback bid

MANILA (AFP): Ford Motor Co.'s request for incentives to build a 6.18-billion-peso (US$154-million) integrated facility in the country has been stalled by opposition from rival car manufacturers, industry sources said yesterday.

The trade department's Philippine Economic Zone Authority was forced to defer approval of Ford's application for incentives such as tax breaks and duty-free importation of capital equipment, said the sources, who asked not to be named.

Vince Socco, senior vice president of current market leader Toyota Motors Philippines Corp., said the granting of perks to Ford would give the giant U.S. automaker an "advantage" over existing players who are not getting such incentives.

"The issue at stake is how well can the government maintain a level playing field and how serious it is in implementing consistent government policies," he said.

Another industry official, who requested anonymity, said the granting of incentives to Ford would "distort the playing field."

Ford has applied to set up an auto-assembly complex worth 4.18 billion pesos and a separate facility to manufacture automotive parts costing two billion pesos -- the biggest investments so far in the sector dominated by Japanese carmakers.

A small portion of the production from these plants will be geared for the domestic market but most will be for export, officials said.

Lilia de Lima, economic zone director general, had tabled Ford's request for discussion by the authority's board of directors last week.

If approved, Ford plans to set up the plant at an industrial park in the province of Laguna just south of Manila, trade officials said.

It will mark the U.S. giant's return to the Philippines after it pulled out 16 years ago at the height of an economic crunch following the assassination of opposition leader Benigno Aquino in 1983, blamed on the government of dictator Ferdinand Marcos.

Ford's planned investment comes in the middle of turbulence whipped up by the Asian financial crisis.

In 1996, Ford's rival General Motors Corp. bypassed the Philippines in favor of Thailand as the site of a major plant. General Motors has delayed the opening of the plant because of the turmoil in which Thailand has been among the hardest hit.

An industry group said earlier this month that automotive sales were expected to fall by a maximum 40 percent this year due to the weaker peso and high interest rates.

Sales by local assemblers plunged 26.2 percent from a year earlier to 8, 586 units in January, the group said.