AN INCENTIVE program is being crafted for the automobile manufacturers who will invest in the Philippines, an official said.
Philippine Institute of Development Studies (Pids) acting vice-president Dr. Rafaelita M. Aldaba, who was guest in Thursday's 3rd National Conference of the Independent Business Clubs at the Marco Polo Hotel, told reporters that the incentive program will help rebuild the domestic market of the automotive industry and also to attract investors.
But she did not elaborate what these incentives are and when it will take effect. According to automotive industry experts, demand for automotive vehicles is expected to peak up in 2015 or 2016, thus the need to localize automotive manufacturing. "Currently, the country is only engaged in complete knock-down (CKD) operations wherein we import the CKD parts and assemble them here. This is done by major automotive companies in the country," she said. According to Wikipedia, CKD is a form of knock-down kit -- parts of a vehicle that are typically manufactured in one country or region, then exported to another country or region for final assembly. CKD is "a complete kit needed to assemble a product. It is also a method of supplying parts to a market, particularly in shipping to foreign nations, and serves as a way of counting or pricing." Aldaba said they are aiming to shift operations in the country from CKD to full automotive manufacturing. "We want the important parts manufactured here like the engines or to manufacture certain car models as part of the regional network of the company," she said. In order for this to happen, there is a need to have incentives for the companies to invest here and also to rebuild the domestic market and create economies of scale. According to Inc.com, economies of scale refer to economic efficiencies that result from carrying out a process on a larger scale.
Incentive program for car manufacturers in Philippines readied
