BoI drafts safety nets for auto makers

The government plans to adopt safety measures that would shield the country’s auto industry from the severe impact of the global financial crisis, according to Board of Investments (BoI) managing head Elmer Hernandez.

This was highlighted by Hernandez in his speech during the press launching of the all new Honda City model at the Glorietta Activity Center in Makati City yesterday where he stressed that the year 2009 could be frustrating not only to the entire business sector but more so for the auto industry.

Apart from the steps being undertaken by local assemblers to ensure the long-term viability of their operations amid critical times, Hernandez said the government is also taking similar moves to guarantee the economic future of the local industries.

Several companies have already restructured their business plans including labor agreements. “We understand that these steps are aimed at reducing the vulnerability of businesses to the global economic problem,” Hernandez said.

“These measures should support the industry’s sales outlook of a flat sales growth at the minimum or a 4 percent sales increase at the maximum,” he added.

Although Hernandez declined to give details on the proposed measures, he, however, explained it could involve both fiscal and non-fiscal incentives.

He added it will be discussed today at the BoI Management Committee meeting then for further talks and possibly for approval by the board next week.

Honda Cars Philippines Inc. president Hiroshi Shimizu, in the same event, said the introduction of the new City is expected to boost the company’s overall sales by 10 percent more this year with the new model increasing sales by over 2,000 units from 5,000 units in 2008 to 7,000 units this year.

In 2008, Honda posted a 17 percent drop in total sales due to the contraction in sales of the Civic, CR-V and the Accord models. Total sales last year reached 14,300 units.–Ayen Infante, Daily Tribune