The automotive industry has failed to sustain its momentum from the holidays, as it opened the year with a sales dip in anticipation of additional taxes on imported models.
In a joint report on Thursday, the Chamber of Automotive Manufacturers of the Philippines Inc. (Campi) and the Truck Manufacturers Association disclosed January sales slipped 1.4 percent to 23,380 units, from 23,732 units during the same month last year.
Sales in January dropped more than 15 percent from the 27,596 units sold last December.
Broken down, sales of passenger cars jumped over 11 percent to 7,295 units, from 6,543 units. However, those of commercial vehicles, which accounted for the bulk of the total, declined by above 6 percent to 16,085 units, from 17,180 units.
Campi President Rommel R. Gutierrez said vehicle assemblers are dealing with issues from all fronts, not just from operating in the time of Covid-19, but coping with the safeguard placed by the government on car imports.
“The pandemic still poses a challenge to the automotive industry,” Gutierrez said. “We are also monitoring how the market will react to the imposition of provisional safeguard duties starting in February, which could potentially impact on the prices of imported motor vehicles.”
In January the Department of Trade and Industry (DTI) heeded the petition of a trade union and slapped an extra duty per unit of P70,000 on passenger cars and P110,000 on light commercial vehicles (LCVs).
The DTI issued the decision in favor of the Philippine Metalworkers Alliance, which filed a petition before the agency to employ a safeguard measure on vehicle imports. The trade union argued the influx of car imports into the Philippines is making it less viable for investors to manufacture units here and reduces job opportunities for Filipino workers.
Based on the DTI’s report, imports of passenger cars increased an average of 35 percent during the period of investigation from 2014 to 2018. The share of imported vehicles when compared to domestic production jumped to 349 percent in 2018, from 295 percent in 2014.
Imports of LCVs tripled to 51,969 in 2018, from 17,273 in 2014, to signify an increase in its share relative to domestic manufacturing to 1,364 percent in 2018, from 645 percent in 2015.
As for those made here, the market share of locally made passenger cars declined to a range of 22 percent to 25 percent, while the share of imports captured more than 70 percent. Likewise, the market share of LCVs made in the Philippines dipped to 7 percent in 2018, while that of imports improved to 93 percent.
Citing data from the Philippine Statistics Authority, the DTI said in its report employment in the manufacturing sector for motor vehicles went down by 8 percent in 2018, from a total of 90,275 workers in 2017.
The Tariff Commission will start this month its investigation on whether to uphold and, in effect, extend the safeguard measure slapped by the DTI.
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