VW Philippines to field ASEAN-made cars after 2015

VW Philippines president J.P. Orbeta

Volkswagen Philippines, under Ayala company Automobile Central Enterprise Inc. (ACEI), made a big splash when it made its comeback in 2013. One obstacle for the group is the relatively high prices of its cars. One reason is that the vehicles are imported from Mexico, Germany, and India, and thus incur high import duties of at least 15%. When queried about the possibility of importing cars from the ASEAN region, ACEI president J.P. Orbeta said that the VW is definitely planning to assemble cars within the region, for the region. VW already has a factory in Malaysia, but producing cars only for that country.  The ASEAN free-trade agreement is set to expand by 2015, making virtually all products tradeable within the region with zero tariffs.

“We raised our hand,” Mr. Orbeta remarked if the Philippines was being considered. Here’s hoping that against all odds, VW can establish its regional production base in the Philippines. In our favor are the pool of established local parts suppliers, talented labor, and the track record of Ayala group in automotive assembly. Ayala has previously invested in Honda Cars Philippines and Isuzu Philippines, both of which have world-class assembly plants. Against us is the even better parts network in other countries, and the Philippines’ notoriously poor infrastructure. Either way, we hope to have some competitive VW products arrive sometime after 2015. Meanwhile, let’s keep dreaming of that Golf GTi.