Car manufacturers and distributors are expected to further increase the prices of vehicles in the Philippines in the coming months, as the stronger US dollar and Japanese yen made imported units and parts more expensive in peso terms.
An industry executive said while several companies started adjusting prices as early as January, it could be followed by another increase in the coming months, as the peso weakened to a 10-year low against the greenback in the first quarter. The peso closed at 50.175 against the dollar Thursday, near the 10-year low of 50.4 a dollar registered on March 3 this year.
Major automotive companies such as Toyota Motors Philippines Corp., Mitsubishi Motor Philippines Corp., Hyundai Asia Resources Inc. and Honda Cars Philippines now sell their compact sedan models for P1 million or more a unit.
Mitsubishi Motor Philippines said it rolled out a 5-percent price hike across all models including the Fuso trucks starting January 2017, while Toyota Motor did not respond to questions on the level of the price adjustment. Hyundai is expected to announce its new prices on Monday.
Car makers said that with the peso steadying at 50 a dollar, another upward adjustment in prices especially for imported vehicles might be needed.
Mitsubishi said a 3-percent to 5-percent price hike would translate into P10,000 to P20,000 increase in auto prices. The company imports Montero Sport and Strada from Thailand and Pajero, Lancer Ex, ASX and Fuso Truck and Bus models from Japan. It began assembling Mirage 4 in the Philippines this year.
Mitsubishi vice president Froilan Dytianquin earlier said that 2016 prices were based on a foreign exchange rate of 47 a dollar. He said as most car companies were using the US dollar to import vehicles, they were also expected to increase their prices based on proper timing.
Dytianquin also said while Mitsubishi would like to maintain the prices of vehicles at current levels, it was compelled to raise them because the strong dollar significantly raised the import costs of these vehicles.
Mitsubishi, with the longest history of more than 50 years of vehicle production, was the first automaker to achieve the 500,000-unit production milestone in 2009 and posted a new record of 600,000 units in 2016.
Target production for 2017 is about 42,000 units, with the Mirage accounting for the bulk.