Fitch sees ‘mild recovery’ in Phl car sales next year

The Philippine auto industry is set to recover next year, after car sales were dragged by higher excise taxes on vehicles this year, Fitch Solutions Macro Research said in a commentary.

However, negative economic developments will keep sales under pressure.

The research group said households and businesses have adjusted to the higher vehicle excise taxes imposed under the Tax Reform for Acceleration and Inclusion (TRAIN) law.

Republic Act No. 10963 or the TRAIN law imposed a tax rate of 4 percent on vehicles costing P600,000 and below, from the previous rate of 2 percent, with more expensive cars getting ever higher taxes.

“In 2019, we expect a mild recovery in the Philippines’ new passenger car market, and forecast sales to grow by 3.2 percent, reaching a total of around 120,000 units by yearend,” Fitch Solutions said.

Latest data from the Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI) and Truck Manufacturers Association (TMA) showed vehicle sales in the first 10 months of the year declined by 13.3 percent to 294,207 units from 339,380 units in the same period last year.