RP to help local auto parts makers

RP to help local auto parts makers

MANILA (AFP): The Philippine government is to draw up a plan
this year for the auto industry to aid local manufactures of
spare parts, Trade and Industry Undersecretary Melito Salazar
said here yesterday.

Salazar said the Motor Vehicle Development Program would
hopefully "accelerate the development of the car parts industry,
taking into consideration how we can be of help to the consumer."

The government was consulting with both auto assemblers, car
parts manufacturers and consumers, he said, adding that any
changes in the existing program would "make the auto industry
strong."

The government had said it was considering revisions to the
vehicle program including liberalizing the importation of semi-
assembled automobile units, called semi knocked-down kits (SKDs).

The proposed changes are seen as being aimed at luring
investment from General Motors Corp., which plans to open a
parts-making venture and car assembly facilities in the
Philippines.

However local parts manufacturers and assemblers have
criticized some of these revisions, saying they would hurt them.

Salazar said that the department had met with potential new
investors but had told them that Manila would also have to
consider the position of existing vehicle assemblers who had
already made large investments in this country under the old
rules.

He said that whatever the changes, the Philippines would still
retain a tariff differential between imports of SKDs and imports
of auto parts for assembly into new vehicles.

However, the tariff differential may be lower than the present
37 percent level.

Earlier this week, U.S.- auto giant General Motors re-entered
the Philippine automobile market, announcing that they would be
importing two models of their Opel brand into this country.

However General Motors officials downplayed the reports of a
parts-making and car assembly facility here and said they were
still trying to determine "what level of investment and activity
in the Philippines would be appropriate."

Earlier this week, Japan's Mazda Motor Corp. and Ford Motor
Co. of the United States announced they were discussing plans for
a joint venture to manufacture cars in the Philippines,

The Philippine vehicle market is dominated by local assemblers
of Japanese and South Korean brands.