Automotive industry off to a slow start in January, sales slump by 4%
The automotive industry was off to a slow start in 2018 with January sales growing at a modest 4 percent only amid higher taxes on cars effective January 1 this year.
Official data of the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and the Truck Manufacturers Association showed the 21-member association sold a total of 31,645 units only during the month compared to the 30,425 units sold in January, 2017.
While this is considerably low compared to the growth rate of January 2017 (27% up versus January 2016), CAMPI still considered January 2018 sales as satisfactory and a good start for the auto industry.
“We will continue our efforts in sustaining the growth momentum of past years,” according to CAMPI President Atty. Rommel Gutierrez.
Among the motor vehicle categories, only the light commercial vehicle (LCV) and trucks and buses categories posted positive growth. Sales of other categories posted steep declines.
According to the data, the LCV segment, which is composed of sports utility vehicle models, significantly grew by 23.3 percent. The trucks and buses category (Category 4) also posted an encouraging 9.9 percent increase in sales.
But sales of passenger cars dropped by 10.9 percent on higher excise taxes. Likewise, sales of Asian utility vehicles decreased by 3.6 percent while light trucks showed a steeper 38.7 percent decrease and trucks and buses (Category 5) also declined by 18.5 percent.
As this early, a trend is already slowly emerging to a shift towards the LCVs, which are into their sweet spot with lower excise taxes. Cars priced starting R1.8 million to R4 million have lower excise tax rates under the TRAIN law. Pick-ups are also exempted from the higher taxes because they are defined as trucks.
Industry leader Toyota Motor Philippines Corp. registered a negative growth of 9.1 percent, but second biggest player Mitsubishi Motors Philippines Corp. posted 36.7 percent increase in sales and Ford Motor Co. Philippines also grew by 8.7 percent versus January 2017 sales.