Hyundai, the world’s most aggressive car manufacturer, is planning to assemble its subcompact car Eon model under the CARS (Comprehensive Automotive Resurgence Strategy) Program.

Hyundai Asia Resources, Inc. (HARI), the exclusive distributor of Hyundai motor vehicles in the country, has already sought for registration under the Motor Vehicle Development Program. Registration under MVDP will pave the way for its entry under the CARS Program, which grants $600 million tax incentive to three participants that can manufacture 200,000 units each over a six-year period.

A source privy to the project said Hyundai’s entry model is its small but best-selling Eon car. It will be manufactured by STAR Motors Manufacturing Corp. at its Sta. Rosa, Laguna plant. STAR Motors is owned by Richard Lee, also owner of HARI. At present, STAR Motors only assembles Nissan Patrol.

The source further said that HARI is expected to export some of its Philippine-assembled Eon to other ASEAN countries.

The Hyundai Eon, or Hyundai Altos Eon, is imported completely built-up from Korea. It is one of the very popular sub-compact cars in the country with a price tag of R508,000.  As of the first semester this year, HARI reported total sales of 10,500 units for its sub-compact category, which groups Eon and Accent (which sells at R668,000), from only 6,761 in the same first semester of 2015.

There was no breakdown on HARI’s subcompact sales, but this category accounts for the bulk of HARI’s total passenger car sales of 11,207 unit sales in the first semester this year. Overall, HARI sold 16,362 units in the first semester from only 10,689 units in the same first period last year.

On Friday, Trade and Industry Secretary Ramon M. Lopez raised a “highly feasible” third player in the CARS Program but refused to identify saying this might preempt the applicant.

According to Lopez, the third CARS player which is an existing market player already plans to enter the program as it is now.    “There is no tweaking of the program,” Lopez said adding the applicant is already 40 percent sure of its application.

There are other interested parties in the CARS Program including Isuzu Philippines Corp. but they have difficulty complying with the 200,000 production volume over a six-year period. Isuzu wants the BOI to tweak the CARS Program to allow other car companies to meet the requirements.

The two approved CARS Program participants are Mitsubishi Motors Philippines and Toyota Motor Philippines.

Mitsubishi will assemble its Mirage sedan and Mirage hatchback starting next year while Toyota to follow assembly Vios entry model by 2018.

The $600-million tax incentive translates to $1,000 subsidy to per unit of locally produced CARS model. This tax subsidy should put car production in the Philippines competitive with the cost of producing the same car in other ASEAN countries.

Source: www.mb.com.ph