‘Govt support key to survival of PH uto parts industry’

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The Motor Vehicle Parts Manufacturers Association of the Philippines (MVPMAP) on Thursday said the local auto parts manufacturing industry needs government support in the form of a long-delayed Roadmap for the Automotive Industry in order to survive.

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The sector also sees the adoption of technical know-how from foreign partners in joint ventures as vital to its survival.

MVPMAP President Ferdinand Raquelsantos said in a statement that this is necessary for auto parts industry to break through the automotive supply chain not only in the country but in the region and ultimately, in the world as well.

“The resulting provisions and upgrades in engineering, research and development, testing facilities and newer, better manufacturing technologies are what we earnestly desire. This will result in better rapport with the OE [original equipment]assemblers that comes from them knowing that we have a foreign partner that they know and is firmly established,” Raquelsantos said.

He revealed that the first step in this entire process is providing to the industry the much-needed support from the government described in the Roadmap for the Automotive Industry, which has been under development since 2012.

“Government support inclusive of fiscal and non-fiscal incentives is the main ingredient to spur the ailing local auto parts industry and ultimately, make it a force to reckon with the region. But the support must also be extended to the OE assemblers to encourage them to assemble more new models locally or to expand production capacities for models that already assemble locally. It is academic that whenever there is growth in local vehicle CKD assembly, parts makers ultimately benefit from it,” Raquelsantos said.

He also disclosed that the Philippines is preparing to host the upcoming Asia Pacific Automotive Dialogue with the theme, “Linking Automotive Parts Supplier SMEs into the Global Value Chains”.

Raquelsantos added that part of the objective of this regional dialogue is to identify roadblocks to the efforts of the SMEs to be part of the global value chain and ultimately become Tier 1 suppliers.

“This early, government support in terms of providing industry incentives that would bring local SMEs to par with their competitors in the region is seen to be very critical and will play a major role in determining if we make it or not,” he said.

“At any rate, we are happy to announce that in this project, five of our local SME auto parts makers have been nominated to go through the process of pre-qualifying to become suppliers in the global OE automotive market and consequently, be global exporters of locally-manufactured auto parts. This is a significant breakthrough and we believe that this can finally be a reality if government comes to our aid and provides that much-needed impetus to bring this all to fruition.

This is one of the biggest breaks we have all been praying for and finally, we hope to have government on our side as we make that giant step forward,” Raquelsantos added.

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  1. The greater use of electronics and software in vehicles, and the ability of cars to connect to smartphones and other devices, is providing automakers, suppliers and technology firms with new business opportunities.