Car makers stick to sales growth goal

DESPITE GLOBAL CHIP SHORTAGE

Vehicle assemblers are sticking to their 30 percent sales growth forecast this year, but are closely watching any impact the global chip shortage may have on local car sales.

Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI) president Rommel Gutierrez said in a text message the group has not seen any effect on local car sales so far from the ongoing global chip shortage.

“We are strictly monitoring the situation,” he said.

He added the group has not revised its forecast for total automotive industry sales this year.

Manufacturing firms around the world, including those in the automotive industry, are facing difficulty in securing computer chips for their products as the pandemic has brought changes both in supply chains and in consumer preferences.

According to a CNN report, as car manufacturers temporarily suspended factory operations last year due to the pandemic, semiconductor manufacturers transferred their supply to those engaged in the production of electronic devices such as smartphones and laptops, which have seen strong consumer demand.

By the time vehicle sales recovered and auto makers were ramping up production, it was difficult to get hold of the chips.

As of the first quarter, combined sales of the CAMPI and Truck Manufacturers Association (TMA) reached 70,312 units, up nine percent from 64,542 units in the same period last year.

Meanwhile, sales of the Association of Vehicle Importers and Distributors Inc. (AVID) reached 15,857 units in the January to March period, nine percent higher than the 14,554 units in the same period a year ago.

While sales increased yearon-year in the first quarter, the local automotive industry continues to face challenges given the ongoing pandemic and the government’s move to impose provisional safeguard duties on imported vehicles.

Earlier this year, the Department of Trade and Industry decided to slap provisional safeguard duties in the form of a cash bond amounting to P70,000 for every imported passenger car and P110,000 for every light commercial vehicle unit brought in from overseas, after its evaluation of a petition filed by the Philippine Metalworkers’ Alliance showed higher vehicle imports caused injury to the local vehicle manufacturing industry.

The provisional safeguard duties took effect last February and would be in place for 200 days.

With the provisional safeguard duties in place, customers have to shell out more for purchases of vehicles covered by the measure as some automotive firms are collecting deposits.

At present, the Tariff Commission is conducting an investigation to determine if provisional safeguard duties should be made definitive and be imposed for an extended period.