Auto importers and consumers will bear the brunt of the additional tariff the government has imposed on passenger cars and light commercial vehicles, according to the Association of Vehicle Importers and Distributors.
The tariff which takes effect before end of the January will cost an extra P70,000.00 on passenger cars and P110,000.00 on Light Commercial Vehicles.
AVID said the tariff hike came at a time when the auto industry was reeling from the impact of the virus pandemic on world economies. In the Philippines, AVID posted a 41% drop in sales to 51,719 units in 2020 from the 87,169 vehicles sold in 2019. AVID attributed this decline to the lockdowns, limited economic activity, and weak consumer demand.
The 21-member group representing 26 global brands nevertheless noted that it finished the year strong with 5,683 units sold in December, or a 15% increase versus the previous month. AVID said this indicates a slow but steady recovery coming from the “most challenging period in the automotive industry.”
“Automotive was among the hard hit sectors in this pandemic and we continue to feel the impact as sales, after-sales and auto-related services remain lackluster. Despite the hurdles, the industry quickly adapted to the new normal, survived, and are finally seeing some signs of revival. However, we see more headwinds in the coming months,” AVID President Ma. Fe Perez-Agudo said.
The PC segment was greatly affected by the pandemic dipping by around 46% in 2020 with only 16,588 units sold in 2020. Hyundai reported the most number of sales in this segment with a total of 8,464 units sold followed by Suzuki with 6,177 units and Ford with 1,005 units.
The LCV segment also recorded a substantial decrease in 2020 with 34,826 units sold equivalent to a 38% drop compared to the same period last year. Ford continues to be at the top of this segment with 13,770 units sold while Suzuki holds second place with 9,338 units, followed by Hyundai with 7,882 units sold since the start of the year.
In the Commercial Vehicles (CV) segment, AVID recorded a total of 305 units sold for the 2020, or a 66% decline in sales compared to the 907 units sold in 2019.
“While the worst may be behind us, we still have a long way to go. If we are to restore consumer confidence and revive this sector, we should focus on creating more job opportunities, upgrade infrastructure and logistics, and improve the ease and cost of doing business. We are all for the long-term development of the auto industry in the new normal,” Agudo said.
