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CARS program: A boon for PH automotive part makers

Published: 7.20.2023

The Comprehensive Automotive Resurgence Strategy (CARS) initiative has been acknowledged for its crucial role in supporting the survival of the domestic automotive industry in the Philippines, particularly local parts manufacturers.

Introduced in 2015, the CARS program aimed to offer both fiscal and non-fiscal incentives to participating car manufacturers who meet the specified policy requirements. These criteria included achieving sales targets for locally assembled vehicles and investing in the production of essential parts within the country.

In a recent interview, Ceferino Rodolfo, the Undersecretary of the Department of Trade and Industry (DTI), highlighted the positive impact of the CARS program on the growth of local vehicle assembly. He emphasized that without the CARS program, locally manufactured vehicles might have been close to non-existent, which could have severely affected the livelihood of parts manufacturers.

According to Rodolfo, the CARS program has significantly contributed to generating around 100,000 jobs in the automotive industry. Moreover, it has successfully raised the localization rate of car manufacturing in the Philippines to 40%.

Originally slated to run for six years, the CARS program received an extension until 2025. Presently, the government is contemplating a proposal to further extend it for an additional five years.

While Rodolfo acknowledged the program's success, he also expressed that there is still more work to be done. The government remains fully committed to providing continuous support to the automotive industry with the aim of creating more jobs and fostering economic growth.

Nevertheless, as the CARS program nears its completion, the government faces the critical task of deciding its future. Several key factors will come into play during this decision-making process, including the current state of the automotive industry in the Philippines, available funding, and potential environmental impacts.

Should the government opt for extending the CARS program, it will require implementing certain sustainable changes. These may involve further increasing the localization rate of car manufacturing, revising the incentives offered to participating manufacturers, or introducing more competitive elements to the program.

While uncertainties surround the future of the CARS program, one certainty remains—the government's steadfast commitment to supporting the Philippine automotive industry. Before reaching a verdict, all relevant factors will be meticulously evaluated to ensure a well-informed decision about the program's continuation.

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