When Ford ceased local vehicle assembly in the Philippines in 2012, the country lost more than just a car manufacturer. The exit marked a significant setback for the Philippine automotive industry, dealing a blow to local suppliers, workers, and the broader economy. More than a decade later, the Philippine Parts Makers Association (PPMA) continues to lament the missed opportunity and warns that without proper government intervention, the nation risks losing more ground in the global auto manufacturing sector.

Ford’s departure resulted in the closure of its Sta. Rosa, Laguna assembly plant, leading to job losses for hundreds of workers and severely impacting local auto parts suppliers. The shutdown affected an entire ecosystem of businesses that relied on Ford’s assembly operations, including small and medium enterprises supplying components like batteries, wiring harnesses, metal parts, and plastic trims.

“The closure was a huge setback,” said Ferdi Raquelsantos, President of the PPMA. “Ford was one of the few carmakers assembling vehicles here, and when they left, it weakened the entire supply chain. It discouraged other manufacturers from considering the Philippines as a viable production hub.”

At the time, Ford cited the lack of economies of scale and high logistics costs as key reasons for shutting down its Philippine operations. Instead, the company shifted its focus to its larger production hubs in Thailand, where government incentives, infrastructure, and strong support for the automotive industry made manufacturing more competitive.

Industry experts argue that Ford’s departure could have been avoided with stronger government support, better incentives, and a more competitive automotive policy. Neighboring countries like Thailand and Indonesia aggressively courted automakers with tax breaks, infrastructure development, and policies that encouraged local manufacturing.

“We were simply not competitive,” Raquelsantos added. “Our auto policies at the time were not designed to keep manufacturers here. We didn’t have the kind of tax incentives and industry support that Thailand was offering.”

The lack of a long-term strategy to attract and retain vehicle assemblers hurt the country’s position in the regional supply chain. While Thailand evolved into the “Detroit of Asia,” the Philippines struggled to maintain local assembly operations.

Today, PPMA is pushing for more aggressive policies to revive local automotive manufacturing. The association has been calling for better incentives under the Comprehensive Automotive Resurgence Strategy (CARS) program, as well as tariff protection against the influx of imported completely built-up (CBU) vehicles.

“We need to rethink our approach,” Raquelsantos emphasized. “We should focus on policies that make it attractive for car manufacturers to set up production here. The government must provide long-term stability, infrastructure investment, and incentives that will encourage local assembly instead of relying on imports.”

PPMA believes that with the right policies, the Philippines can still reclaim its role as an automotive manufacturing hub, particularly in the emerging electric vehicle (EV) sector. The push for EV incentives and battery production investments presents an opportunity to rebuild local production.

“We lost Ford, but we don’t have to lose the future,” Raquelsantos concluded. “If we act now, we can position the Philippines as a key player in the EV industry and prevent another exodus of manufacturers.”

Ford’s exit remains a painful chapter in Philippine automotive history, but it also serves as a lesson on the importance of a competitive and well-supported manufacturing environment. With global shifts toward electrification and sustainable mobility, the country still has a chance to regain lost ground. The question remains: Will the government and industry stakeholders take the necessary steps before another major manufacturer decides to leave?