Vehicle importers and distributors saw an 11-percent decline in unit sales in the first half of the year, a slump which a top official said should be temporary.
According to the Association of Vehicle Importers and Distributors (Avid), member companies sold 43,138 units in the first semester, a drop from the 48,344 units sold in the same period in 2017.
In a statement, the group said the slow demand couldn’t be blamed on the Tax Reform for Acceleration and Inclusion (TRAIN) law alone. “Higher petroleum prices raise the total cost of owning vehicles and the indirect impact of higher interest rates that affect buyer preferences and priorities,” the group said.
The tax reform law lowered the personal income tax but imposed higher consumption taxes on goods such as automobiles. As a result, prices of most vehicles rose.
The group said some consumers must have bought new vehicles in late 2017 “to take advantage of the lower prices and lower interest rates.”
The figures came a day after joint data from vehicle manufacturers, which account for the bigger share of the market, reported a drop in their sales during the first half of this year.
Rommel Gutierrez, president of Chamber of Automotive Manufacturers of the Philippines Inc., said on Tuesday that the decline in sales was largely in reaction to inflation, as consumers opted to prioritize buying basic goods.
For her part, Avid president Ma. Fe Perez-Agudo said this was just a temporary slump. “The consumers are still adjusting to new income and new commodity price levels.”
Avid member companies sold a total of 16,176 passenger cars from January to June against the 18,769 units sold the previous year, a decline of 14 percent. Hyundai is the main driver of this segment, selling 10,838 units year-to-date.
Light commercial vehicle (LCV) sales also went down by 10 percent across segments with the exception of pick-ups since these were exempted from paying excise taxes under TRAIN.
The segment hit 26,528 units sold in 2018 versus the 29,575 units sold in the first semester of 2017. Ford continues to dominate the LCV segment, selling a total of 12,155 units sold.