Automakers’ 2017 challenge: sustaining growth

THE Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) expects the industry to face a “challenging year” in 2017 as automakers strive to sustain the record-breaking pace of growth in the past half decade, a top off icial said.

Rommel R. Gutierrez, president of CAMPI and a first vice-president at Toyota Motor Philippines Corp. said that the automobile industry has been growing significantly in the past five years that the challenge has shifted to how to sustain the growth.

“2017 is going to be a challenging year because 2016 has been very good. The increase started in 2012,” he told reporters in a year-end media briefing, adding that CAMPI will be meeting in January to discuss its targets for the new year.

Mr. Gutierrez declined to comment on the hike in excise taxes that is expected to take effect in 2018.

Prior to the briefing, officials of various automakers such as Mitsubishi Motors Philippines Corp. and Isuzu Philippines Corp. have come forward to say that higher tax rates would dampen unit sales. They also said that the increase could lead to a spike in sales volume next year as buyers time their purchases to avoid the additional tax in 2018.

The Finance Department submitted to Congress earlier this quarter the first tax reform package which included increasing the current rates of excise taxes imposed on automobiles.

CAMPI now officially expects to exceed the 500,000-unit sales mark by 2020, instead of 2022, due to favorable market conditions.

Even so, the industry could exceed the 500,000-unit mark as early as 2018, if it continues to grow between 20% to 25%, said Joseph T. Bautista, marketing head of Isuzu Philippines Corp., earlier this month.

Two groups currently provide data on auto sales — CAMPI jointly reports with the Truck Manufacturers Association (TMA), largely touching on auto brands assembled locally. The Association of Vehicle Importers and Distributors (AVID) also publishes its own report.

Data jointly released by CAMPI and TMA showed that member companies sold 325,468 units in the 11 months to November, up 24.3%.

AVID, on the other hand, has yet to release sales data for November. However, based on available figures on its website, car sales of member companies amounted to 68,746 units in the first 9 months of the year, up 77%. —