Imported vehicle sales drop 11% in 6 months

Sales of the country’s vehicle importers fell 11 percent in the first six months of the year as higher taxes on cars, interest rates and petroleum prices dampened demand from prospective buyers.

In a statement yesterday, the Association of Vehicle Importers and Distributors (AVID) said its members sold 43,138 units from January to June this year, lower than the 48,344 units rolled out in the comparable period last year.

AVID president Ma. Fe Perez-Agudo said the group had lower sales “as the consumers are still adjusting to new income and new commodity price levels,” adding that the situation is temporary.

“Nevertheless, we see this as a transitionary period and may soon normalize as both supply and demand factors stabilize,” she said.

The first package of the Tax Reform for Acceleration and Inclusion (TRAIN) law, which took effect earlier this year and imposed higher excise taxes on automobiles, has tempered demand for cars.

Apart from TRAIN, higher petroleum prices and higher interest rates further weakened consumer demand for vehicles.

While the first package of TRAIN is affecting consumer demand for vehicles, AVID expects the market to eventually adjust to the new tax regime.

The additional excise tax had an immediate impact on the passenger car (PC) and commercial vehicle (CV) segments, but tax exemptions on hybrid and electric vehicles have put AVID in a favorable position.

AVID’s PC sales declined 14 percent to 16,176 units in the January to June period against 18,769 units the previous year.

CV sales also went down 10 percent to 26,528 units as of end-June from the 29,575 units a year ago.

Earlier this week, the Chamber of Automotive Manufacturers of the Philippines Inc. said its combined sales with the Truck Manufacturers Association Inc. also slid 12.5 percent to 171,352 units in the January to June period from 195,772 units sold in the same period last year.