Mitsubishi PHL plans to hike car prices in January

MITSUBISHI MOTORS Philippines Corp. (MMPC) said it is looking at raising prices of its vehicles by as much as 5% starting January, as the Philippine peso continued to weaken against the US dollar.

In a statement, the company said it would implement a price hike within the range of 3% to 5% or around P10,000 to P20,000, citing the peso’s weakening in recent months.

“The price hike is attributed to the weakening Philippine peso against the US dollar in recent months. As much as MMPC would like to maintain the prices of its vehicles at their current prices, MMPC is constrained to adjust its prices since the severe Forex ( foreign exchange) environment has raised significantly the importation costs of these vehicles,” the company said in a statement.

MMPC imports the Mirage, Mirage G4, Montero Sport and Strada from Thailand. On the other hand, the Pajero, Lancer EX, ASX and FUSO Truck and Bus models are imported from Japan.

Froilan G. Dytianquin, MMPC first vice- president for marketing, told reporters in a text message that the company used a foreign exchange rate of P47 to $1 and ¥101.

“The forex we have used is at 47 to US and 101 JPY. We may increase by January 2017,” he said in a text message to reporters.

This comes as the Philippine peso hit record-lows against the greenback in recent months. On Nov. 24, the peso breached the P50-to-the-dollar territory — its lowest in a decade — hitting it in an intraday session before closing at P49.98. The last time the peso touched P50 to the dollar was on Oct. 23, 2006 when it closed at P50.055.

Moreover, the announced hike coincides with a plan to increase the excise taxes imposed on automobiles.

Part of a series of tax reform packages under the Duterte administration, the proposal from the Department of Finance includes a restructuring of the current tax rates imposed on automobiles, more than doubling the existing excise tax from 2% to 5% for automobiles with prices below P600,000; 20% for those selling for P600,000 to P1.1 million; 40% for those with prices ranging from P1.1 million to P2.1 million; and 60% for vehicles selling above P2.1 million.

A number of car makers have expressed concern that this move may dampen car sales that otherwise have been growing fast despite worsening traffic. The Finance department expects this tax package to be effective in 2018, assuming it gets passed for legislation.

Mitsubishi is the country’s second largest automaker in terms of sale. As of October, Mitsubishi has 17.18% of market share, following Toyota Motors Philippines Corp., which currently leads the industry at 44.18% of total units sold, monthly data from CAMPI and Truck Manufacturers Association (TMA) showed.

Asked if the industry expects higher price rates, a top official from the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) did not respond for comment as of press time. —