Volkswagen mulls production base in the Philippines

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VW manilaGerman car maker Volkswagen, the world’s number two behind Toyota, said it is considering to establish a production base in the Philippines to supply the local market as well as other ASEAN countries with VW cars, according to a report in the Inquirer.

Volkswagen Philippines, under Automobile Central Enterprise Inc. (ACEI), owned by the Ayala conglomerte, made a big splash when it made its comeback in 2013. One obstacle for the group are the relatively high prices of its cars in the Philippines because they are imported from Mexico, Germany and India, and thus incur high import duties of at least 15 per cent.

Thus, ACEI president J.P. Orbeta said that Volkswagen is “definitely planning” to assemble cars within the region and for the region. The car maker already has a factory in Malaysia, but produces 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.

Orbeta said that the Philippines was being considered, and – “against all odds” – Volkswagen could establish its regional production base in the country together with the Ayala Group.

Ayala has previously invested in Honda Cars Philippines and Isuzu Philippines, both of which have local assembly plants.

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Reading Time: 1 minute

German car maker Volkswagen, the world’s number two behind Toyota, said it is considering to establish a production base in the Philippines to supply the local market as well as other ASEAN countries with VW cars, according to a report in the Inquirer.

Reading Time: 1 minute

VW manilaGerman car maker Volkswagen, the world’s number two behind Toyota, said it is considering to establish a production base in the Philippines to supply the local market as well as other ASEAN countries with VW cars, according to a report in the Inquirer.

Volkswagen Philippines, under Automobile Central Enterprise Inc. (ACEI), owned by the Ayala conglomerte, made a big splash when it made its comeback in 2013. One obstacle for the group are the relatively high prices of its cars in the Philippines because they are imported from Mexico, Germany and India, and thus incur high import duties of at least 15 per cent.

Thus, ACEI president J.P. Orbeta said that Volkswagen is “definitely planning” to assemble cars within the region and for the region. The car maker already has a factory in Malaysia, but produces 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.

Orbeta said that the Philippines was being considered, and – “against all odds” – Volkswagen could establish its regional production base in the country together with the Ayala Group.

Ayala has previously invested in Honda Cars Philippines and Isuzu Philippines, both of which have local assembly plants.

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