By Philippine News Agency
Honda Cars Philippines, Inc. (HCPI) remains optimistic for next year as the company still expects strong growth in 2017.
HCPI President and General Manager Toshio Kuwahara said the country’s stable economic growth, strong remittance, and business process outsourcing (BPO) industry will continue to drive the expansion of the local automotive vehicle industry.
“I anticipate that macroeconomic growth in the Philippines will be stable as it does in the last few years. It will be driven by the strong demand of the BPO and the continuation of the OFW remittance,” said Kuwahara.
For HCPI’s current fiscal year which will end in March 2017, the car maker expects its vehicle sales to reach 24,000 units.
Honda City shares bulk of HCPI sales, according to Kuwahara.
He also expected the Honda CR-Z which the company launched December 2015 to contribute to this fiscal year’s total sales.
The HCPI chief, however, stressed that in order for all local car manufacturers to thrive in the Philippine market, the government should also provide incentives not only to selected car makers.
Kuwahara also has expressed his disappointment to the current Comprehensive Automotive Resurgence Strategy (CARS) Program which gives perks to three eligible local car assemblers.
“What we initially requested BOI (Board of Investments) is not really by the volume, but something for no matter how many units we produce, but at least they would give us something when we are locally manufacturing it,” he said.
“The bar is too high. The minimum demand for the CARS Program is around 33,000 per year. That’s what we have been telling to BOI when they’re asking about our opinion a few years ago, if they could widely (give) incentives (to) local manufactured vehicle, not having any unit volume or something. The result is the current CARS program, which we are very much disappointed,” the firm’s executive added.
Under the CARS Program, a participating car maker is required to produce and sell at least 200,000 units of the enrolled four-wheeled motor vehicle model for a period of six years.
“It’s something because they only selected a few manufacturers to get the incentive although everybody is trying hard to manufacture vehicles locally,” Kuwahara said.
The government is allotting some P27 billion (USD600 million) for six years to support the production of three car models under the CARS Program.
BOI, the lead agency for the program, implemented the CARS Program in order to encourage local car manufacturers to increase their production and boost their investments to close supply chain gaps in the domestic market, making the country a competitive destination for car assembly.
Meanwhile, Kuwahara said the proposed increase in excise tax for automotive vehicles under the Department of Finance’s new tax regime will not yet affect the industry next year.
“2017 should be still okay but we worry what will happen after the outcome from the tax discussions in 2018. So for next year, I still expect a strong market growth,” the HCPI executive noted.