The Association of Vehicle Importers and Distributors said combined sales of member companies dropped 2 percent in the first quarter from a year ago, as the market continued to adjust to higher excise taxes under the Tax Reform for Acceleration and Inclusion law.
Avid said its members sold 22,758 vehicles in January to March, down from 23,317 units sold in the same period in 2017.
“Avid capped off the first quarter with 22,758 units sold. Despite given market challenges, we remain resolute that the stabilizing market condition and the influx of new products and services will serve as ample boost as we wind-up for a stronger 2018,” said Avid president Ma. Fe Perez-Agudo.
The group said the first-quarter performance was an indication of the industry’s stability amid the transitional or short-term effects of the Train law on consumer sentiment and purchase behavior.
It said the passenger car segment appeared to be less volatile among the two segments, as it experienced a slight weakening in sales to 9,189 units from 9,247 units a year earlier.
Hyundai, a member of Avid, posted a 4-percent growth and accounted for 68 percent of total passenger car sales in the three-month period.
Sales of light commercial vehicles fell 4 percent in the first quarter to 13,569 units from 14,070 units sold in the first quarter of 2017.
Ford led the segment, recording the highest sales of 6,273 units in the first quarter.
Avid said despite the slower growth, it remained confident about the industry as the government’s ‘Build, Build, Build’ infrastructure program was expected to take off.
It said the automotive market would also receive a boost from the strong economic growth which was expected to hit the government’s target range of 7 percent to 8 percent in 2018.
Avid said infrastructure spending and private consumption were expected to sustain positive growth with the implementation of the Train law which increased government revenues and reduced income taxes of most Filipinos.
Avid said the reduction of personal income tax translated into higher purchasing power.