Vietnam overtakes RP in auto production

AUTOMOTIVE production in the Philippines jumped by more than a fourth last year, although the domestic output was lower than in other Asean countries, industry data showed.

Data from the Asean Automotive Federation showed that the number of four-wheel motor vehicles assembled in the Philippines last year increased 28.7 percent to 80,477 units from 62,523 units in 2009.

Motorcycle production zoomed 28.3 percent to 813,361units from 634,032 units in 2009.

However, domestic production paled in comparison to
Thailand’s 1,645,304 four-wheel units, up 64.4 percent from 999,378 units in 2009. Thailand also has a huge domestic sales base, with 800,357 units sold there last year, 45.8-percent higher than the more than half a million units sold in 2009.

Many vehicles churned out in Thailand are exported to other Asean countries, wherein a zero tariff regime prevails under the Asean Free Trade Area.

About a third of the imported cars sold in the Philippines last year came from Thailand.

The three other vehicle-manufacturing Asean countries also outnumbered the Philippines’ output last year:
Indonesia assembled 702,508 four-wheel units, up 51.1 percent year-on-year; Malaysia, 567,715 units, up 16 percent; and Vietnam, 106,166 units.

Although auto assembly in Vietnam last year slightly skidded by 1.5 percent, their locally manufactured vehicles comprised the majority of the 111,737 units sold there last year, Frank Nacua Nacua, Philippine Automotive Federation Inc. secretary general said in an interview.

In the Philippines, only 44 percent of the 168,484 four-wheeled units sold were locally assembled.

Nacua said locally made vehicles sell more than imports in Vietnam because brand new imported cars are slapped a 110-percent excise tax on the declared value.

He said the high costs of power and labor as well as the lack of incentives for the auto industry are slowing down assembly operations in the Philippines.

Domestic vehicle assemblers have acknowledged the declining competitiveness of automotive manufacturing in the country and they want to turn this around. –Ben Arnold O. De Vera, Manila Times

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