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

The Freeman - - BUSINESS -

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.

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