The Philippine automotive industry has conceded sales this year will drop 14 percent mainly because of higher taxes.
“The market itself is down this year. All players have the same sentiments. Currently, we’re down by 14 percent and we hope to stay at that level until yearend,” said Chamber of Automotive Manufacturers of the Philippines Inc. president Rommel Gutierrez.
He said at the sidelines of the 7th Philippine International Motor Show at the World Trade Center the decline was the first time in eight years since automotive sales fell in 2010.
The group earlier predicted a flat growth for the industry in 2018. But month-on-month declines suggested lower sales.
Automotive sales in the first nine months of 2018 dropped 13.8 percent to 261,057 units from 302,869 units year-on-year.
Combined sales of Campi and the Truck Manufacturers Association in 2017 increased 18.4 percent to 425,673 units from 2016, while the Association Vehicle Importers and Distributors reported a 14-percent increase.
Campi vice president Dante Santos said phase 1 of the Tax Reform for Acceleration and Inclusion affected the buying habit of consumers. Many advanced their purchases in the last quarter of 2017 in anticipation of higher car prices in 2018 following an increase in the automotive excise tax under TRAIN 1.
“That’s the best we can do knowing the all other factors were beyond our control. We’re trying to keep the decline to 14 percent in hopes that the industry will slowly rebound in 2019,” Santos said.
He added the industry could not blame the decrease on any legislation.
The reality is that the excise tax is there and the industry should adjust and make the necessary actions to deliver, he said.
The industry is banking on new model introductions and innovative promotions to improve sales.
“This motor show is a show of confidence for the automotive industry. We will bounce back sooner and we expect to keep our targets to be within perspective,” Gutierrez said.