Universal Motors Corp. (UMC), assembler and distributor of Nissan commercial vehicles,
is pursuing a localization program with the establishment of a new production facility
for the assembly of five new vehicle models to be followed by the establishment of a
stamping facility.

UMC is initially investing P205.079 million for the acquisition of entirely new set of production equipment and machinery for the assembly of the five new vehicle models. The new assembly
plant would have an annual production capacity of 6,676 units each of the five models when
the firm starts commercial operation in July 2009 with additional workforce of 195 workers in Carmelray Industrial Park I in Calamba, Laguna.

The Lee-owned UMC is also awaiting for the approval by its Japanese partner Nissan Motor
Co. Ltd. for its body stamping facility project, which would improve the local value added to
their locally assembled vehicles by approximately 30 percent.

"This is in conformity with the government’s policy of encouraging parts production and give
local manufacturers the opportunity to establish links with the company," said Elizabeth H.
Lee, UMC vice president. 

According to Lee, UMC will put first priority on local procurement to promote the local parts manufacturers subject to the approval by Nissan Japan for quality, cost and deliver.

According to Lee, the new vehicle models to be assembled in the new plant include WO29T
(sports utility vehicle), PR832V (utility truck), JU21 (window van), WY25N (multipurpose vehicle)
and MX24 (stationwagon).

These vehicle models have suggested retail price ranging from P600,000 to P750,000 per unit.

UMC said the new CKD vehicle models are high performance, fun-to-drive, high fuel economy,
spacious with functional interior.

Most of the knocked down parts will be sourced from its technical licensing partner Nissan
Motor Co. Ltd. assuring customers of a ready supply of spare parts although the company
said they would prioritize local sourcing of auto parts as long as they pass the quality, cost
and delivery requirement of Nissan Japan.

The proposed activity is covered in the 2007 Investment Priorities Plan and its specific guidelines under Preferred Activities – Motor Vehicle Products.

At present, UMC is a registered participant of the Commercial Vehicle Development Program in Categories 1 to 3 from Asian utility vehicles, light commercial vehicles and vehicles from 3,001
kilogram gross vehicle weight to 6,000 kgs GVW.

UMC, which is owned by the Lee family, has been in the automotive business since 1954, initially assembling Mercedes Benz motor vehicles. It has in the government’s motor vehicle program
since the start of the Progressive Car Manufacturing Program.

UMC’s present Nissan models are Frontier Bravado and Navara, the Urvan Escapade and Estate
and Patrol.

Some of the auto parts the company is sourcing locally for its CKD operations include tires,
mug wheels, batteries/battery assembly, seat assembly including seat covers, bolts and nuts,
rear lighting, stereo, air conditioning, mirror, instruction manual, tool kit, emblem, paints, mud
guard, rear bumper, electronic lock assembly, filter, radiator, accessories and warranty card.

Two House committees on transportation and on trade and industry have jointly approved
the proposed anti-lemon law, giving protection to buyers of brand-new but defective motor
vehicles.

The proposed measure, which seeks to add more teeth to the Consumer Protection Act,
guarantees a buyer of “lemon” vehicles to have his/her automobile serviced up to four times
until it is in good condition with the dealer and manufacturer shouldering the cost of repair.

If the buyer finds his/her car unreliable or unsafe to use after the repair, they may demand
a full refund or a new replacement for the “lemon.”

A buyer can invoke his rights under the proposed law within 12 months after the delivery of
the brand-new car or the first 20,000 kilometers of operation.

The proposal consolidates House Bills 7, 469 and 763 separately filed by Reps. Manuel Zamora
of Compostella Valley, Monico Puentevella of Bacolod City and Junie Cua of Quirino.

During the 13th Congress, the Senate and the House approved a similar bill on third reading
but it was eventually shelved because the House failed to act on it. The Senate went as far
as ratifying the bicameral conference committee report on the bill.

Puentevella, chairman of the House transportation panel, expressed hope that this time
around, the House and the Senate under the 14th Congress would be able to pass the bill
into law.

The lawmaker from Bacolod City said the proposed measure will make up for the shortcomings
of Republic Act 7394 or the Consumer Act of the Philippines, whose implementing provisions
do not efficiently respond to the problem of consumers, particularly with respect to lemon cars.

While the car manufacturers’ organizations in the Philippines claim they recognize their
contractual obligation despite the absence of our own version of the lemon law, the
consuming public needs the assurance for the protection of their rights, Puentevella said.

Puentevella’s opinion was shared by committee on trade and industry chairman Rep. Antonio
Alvarez of Palawan, who said that the measure will “provide relief to consumers as they will
get the full value of the financial investments they have made in purchasing their new vehicles.”

Many vehicle manufacturers, local and abroad, are becoming negligent and non-observant in maintaining the quality standards of newly fabricated units because of heavy demand for new
cars.

Trade Secretary Peter Favila and the Chamber of Automotive Manufacturers of the Philippines
Inc. have expressed their full support for the proposed lemon law. They provided some inputs
on the bill.

“The bill would strengthen consumer protection and guarantee value for the people’s hard-
earned money,” said Favila in a position paper submitted to the committees.