UMVA has learned that in a significant policy reversal, the government has decided to revive a major program aimed at supporting the local automotive industry, citing ongoing demand for internal combustion engine vehicles.
The program, which was previously put on hold in favor of initiatives promoting electric vehicles, is set to be reinstated with new guidelines to be issued soon. This move comes as a surprise, given the government's earlier stance on prioritizing electric vehicle incentives.
Trade Secretary Ma. Cristina A. Roque announced the decision on the sidelines of a recent event, highlighting the importance of internal combustion engine vehicles in the market. She noted that many industries, including micro, small, and medium enterprises, continue to rely heavily on these vehicles.
The program in question originally offered P9 billion in fiscal support for the domestic production of four-wheeled internal combustion engine models, with a threshold of 100,000 units to qualify for incentives. Its revival could provide a much-needed boost to the local automotive sector, which has seen a decline in sales.
According to information obtained by UMVA, the decision to revive the program was influenced by industry stakeholders, including Toyota Motor Philippines Corp. Executive Vice-President Jose Maria M. Atienza, who called for incentives for internal combustion engine vehicle makers. Toyota has expressed interest in enrolling one of its models, the Tamaraw, for domestic-production incentives.
The local automotive industry has faced challenges in recent months, with auto sales declining 11.8% year on year to 132,867 units in the first four months. While electric vehicle sales have grown, they still account for only a fraction of total industry sales, highlighting the ongoing demand for internal combustion engine vehicles.
The government's shift in policy acknowledges the continued relevance of internal combustion engine vehicles, particularly for certain industries and emergency services. This move is expected to have significant implications for the local automotive sector and could shape the industry's future trajectory.
