This article explores why the Philippines’ automotive industry has been less successful than those of its Southeast Asian neighbours, despite its long history of automotive production. We stress policy inconsistency, lack of demand-side policy signals and weak state capacity as explanations, although past policies were successful in developing exports of a few key automotive components. The 2015 Comprehensive Automotive Resurgence Strategy (CARS) hopes to rejuvenate the industry but faces challenges from the lack of a diversified local components sector, continued competition from imported second-hand vehicles and likely competition under free trade agreements, particularly with South Korea.
- industrial policy
- motor industry