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The automotive industry is a highly global industry, it is technology driven and competition is intense. As a product, automotive is complex with large number of parts and components like textiles, glass, plastics, electronics, rubber, metals, etc. that involve different production processes. Promotion of the automotive industry can lead to an expansion of many complementary investments by automotive parts firms which can lay the foundation for broad-based industrial growth.

Currently, the Philippine domestic auto parts industry is composed of 256 companies producing around 330 different parts and components. It has continued to post respectable growth and contribute significantly to manufacturing value added and employment generation.

However, the industry is facing competitiveness issues due to absence of economies of scale and a weak supply base. These are the fundamental issues that must be addressed in order to strengthen the industry and integrate it with regional production networks of foreign automakers. To help firms achieve this, there is a need for strategic industrial upgrading policy and carefully designed temporary subsidies that would target improvement o firm competitiveness.

Within the context of these opportunities and challenges, the Philippine auto parts and components industry is envisioned to become a significant player in the medium-term and targeted to become a regional hub for vehicles and parts in Asia by 2020.

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Title: Roundtable Discussion (RTD) on “Embedding Decent Work in Industrial Policy: The Philippine Automotive Industry as Illustration.

Researcher: Employment Research Division

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