Crack emerges in auto industry lobby for MVDP

A CRACK has emerged in the Philippine auto sector after four top assemblers questioned the leadership of the industry group over its position vis-a-vis a government bid to revise its Motor Vehicle Development Program (MVDP). In a letter dated March 15, Honda Cars Philippines Inc., Isuzu Philippines Corp., Mitsubishi Motors Philippines Corp. and Toyota Motor Philippines Corp. questioned the Chamber of Automotive Manufacturers of the Philippines Inc. (Campi) over its proposal to maintain the current MVDP under Executive Order 156.

The four Japanese carmakers said they “express deep concern on [a] declaration that Campi is not in favor of the new MVDP.”

“These matters were never discussed among members of Campi . . . Your letter to President Arroyo created confusion not only to industry players but also other stakeholders in the industry,” the letter signed by Honda Philippines president Hiroshi Shimizu, Isuzu Philippines president Keiji Takeda, Mitsubishi Philippines president Masahiko Ueki and Toyota Philippines president Michinobu Sugata, stated.

The four Japanese carmakers were referring to a letter Campi president Elizabeth Lee sent to Mrs. Arroyo on March 1, asking that the current MVDP be maintained on fears that the government may reclassify imported used engines and other components from prohibited to regulated imports under the new MVDP.

Trade Secretary Jesli Lapus last Friday told reporters that the Board of Investments (BOI) had responded to a query from Malacañang’s legal department, which sought clarification on the said Campi letter, as well on another letter from the Fair Trade Alliance (FairTrade).

In a letter dated March 8, FairTrade requested that the President refrain from signing the proposed EO that will pave the way for the new MVDP, unless it includes a clear program on how to revive the automotive industry; includes as members of the proposed auto council all industry stakeholders; clearly states that the objective of this new auto development program is to eventually expand, nurture and develop more the completely knocked down (CKD) operations in the country and not just the completely built up (CBU) importation; and strengthens the program against smuggling and/or importation of used vehicles.

Lapus told reporters that the BOI has maintained that all the prohibitions included in EO 156 were kept, and that those excluded in the earlier order would be regulated under the new MVDP.

In a separate letter dated March 19 and addressed to Mrs. Arroyo, the Philippine Automotive Competitiveness Council Inc. (PACCI) said “the leading automotive and auto parts manufacturers fully support this new MVDP.

Besides the four Japanese carmakers, PACCI also includes Ford Group Philippines and the Motor Vehicle Parts Manufacturers Association of the Philippines (MVPMAP).

PACCI found allies among foreign business chambers. In a joint letter to the President, the American Chamber of Commerce of the Philippines, European Chamber of Commerce of the Philippines, and Japanese Chamber of Commerce and Industry of the Philippines, along with the National Competitiveness Council (NCC), said “the proposed MVDP is a step in the right direction, and when implemented effectively shall increase the overall competitiveness of the auto and auto parts manufacturing industries in our country.” –BEN ARNOLD O. DE VERA, Manila Times