http://www.bloomberg.com/news/articles/2015-03-10/car-hub-project-to-spur-philippine-manufacturing-southeast-asia
Philippines, one of Asia's fastest growing economies is aiming at becoming the region's car production hub. And to achieve this the Philippines will offer tax breaks to 3 automakers.
However, car makers will need to meet the minimum production levels of 40,000 vehicles fully built in the country to be eligible for the tax breaks.
The tax breaks will be implemented by the CARS(Comprehensive Automotive Resurgence Strategy) program. The CARS program is projected to save around $17 billion in import costs by 2022. This program will benefit both the government and the private sector.
"The Philippines is seeking to replicate Thailand's success in building its auto industry, betting that a young workforce and its biggest economic boom since the 1950s will lure companies such as Volkswagen and AG."
The Philippines government is also increasing its spending on road & airport development and maintenance, as this will increase FDI and could lead to a growth by 8%.
The Philippines claim of not competing with Thailand in car production but have a vision of being the regional mass producer. Do you think the CARS program will be a successful model?
Philippines, one of Asia's fastest growing economies is aiming at becoming the region's car production hub. And to achieve this the Philippines will offer tax breaks to 3 automakers.
However, car makers will need to meet the minimum production levels of 40,000 vehicles fully built in the country to be eligible for the tax breaks.
The tax breaks will be implemented by the CARS(Comprehensive Automotive Resurgence Strategy) program. The CARS program is projected to save around $17 billion in import costs by 2022. This program will benefit both the government and the private sector.
"The Philippines is seeking to replicate Thailand's success in building its auto industry, betting that a young workforce and its biggest economic boom since the 1950s will lure companies such as Volkswagen and AG."
The Philippines government is also increasing its spending on road & airport development and maintenance, as this will increase FDI and could lead to a growth by 8%.
The Philippines claim of not competing with Thailand in car production but have a vision of being the regional mass producer. Do you think the CARS program will be a successful model?
3 comments:
Erica, this is a very intriguing article. The Philippines has an abundance of labor. Also, CARS has a lot of potential, but I want to see if automakers actually want to do business there. The team I worked on last summer was split between Columbus, OH and Manila. After many discussions with my boss, I found out the trials and difficulties of maintaining a successful business charter with the Philippine government. I feel that the program has potential, but I want to see how industry will respond.
I think this program has a potential to be successful in Philippine. It seems like the government is trying their best to accommodate foreign investors. Once the infrastructures improve, with the tax break and cheap labor, Philippine might be able to compete with Thailand in becoming Asian car manufacturing country
Austin, the point about the charters is rather interesting, especially since most news sources seem to report that the Philippines are one of the economies that's supposed to be strongly on the rise -- or at least on the verge of a strong rise. Any idea why specifically it's so hard to get a working contract?
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