The Philippine automotive industry now expects sales to post growth this year, despite the implementation of the Tax Reform for Acceleration and Inclusion law.
Chamber of Automotive Manufacturers Association of the Philippines Inc. president Rommel Gutierrez said the group was no longer expecting reduced sales this year.
“The least we can predict is a flat growth. It can go higher. We’re not seeing negative [growth in sales],” said Gutierrez.
Under the Train law, excise taxes for vehicles mostly increased, depending on the model and category except for the trucks, pick-up and other mass transportation vehicles.
Taxes rose high as 50 percent for tier 4 vehicles or those with value of over P4 million per unit. Vehicles under the luxury segment previously paid 25 percent excise tax.
Vehicles under tier 1 or those with value of not more than P600,000 are taxed 4 percent, up from 2 percent previously.
The entire sector breached sales targets in 2017 as automotive companies sold over 470,000 units.
About 65 percent of total sales were traced to the exemplary performance of the commercial vehicle category.
Combined sales of Campi and the Truck Manufacturers Association went up 18.4 per percent the Association Vehicle Importers and Distributors reported a 14-percent increase in sales.
The industry is positive that the market will correct itself and start regaining lost opportunities before end-2018. Gutierrez said the industry sales target of 500,000 units by 2020 was “very much within reach.”
“By 2019, we will be more closer to selling 500,000 units. We are even optimistic the industry may exceed that target in the year,” he said.
Gutierrez said new model introductions by car companies would help achieve projections and allay fears of slower sales this year.