Volkswagen Mulls Opening a $200-Million Philippine Factory

Manila | German carmaker and the world’s second largest automaker behind Toyota, Volkswagen is planning to invest $200 million dollar for its planned expansion in the Philippines, news reports said Friday.

President and CEO of Volkswagen Philippines (VW) John Orbeta told reporters about the said investment estimate during the opening ceremonies of the 2015 Manila International Auto Show.

Orbeta however stressed that the plan could only be materialized if the Philippine government could come-up a solution to its expiring policy on tax incentives and other benefits to foreign companies.

The Board of Investments, a Philippine government agency that administers the motor vehicle deployment program is still agonizing over how a new incentives regime can pass the scrutiny beyond the revenue-conscious agencies of the government.

“If they will allow us, Phase 1 of our CKD proposal … will be about $40-50 million,” he was quoted as saying by the Manila Standard Today newspaper. “If we can get to Phase 2, we’re ready to spend as much as $150 million on top of the first investment.”

The planned full-blown car manufacturing facility is expected to assemble imported parts on earlier phase, but production of local parts to follow later according to the CEO.

Last May, Aquino signed a law that would allow local automotive industry to produce more parts. Volkswagen plan is aligned with the said law, but a separate policy company incentives must be established first before the giant company could move forward.

The said production plant could add thousands of jobs locally according to news reports.

/Oto Melara/ Assisted Press

Source: Bangkokpost, Manila Bulletin

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