TRAIN, inflation barrel down on car importers’ sales
A group of vehicle importers saw sales drop 17 percent in 2018, blaming it on a slew of factors including tax hikes and high inflation.
The Association of Vehicle Importers and Distributors, Inc. (Avid) sold 88,700 units last year, fewer than the 106,285 units it sold the previous year.
Avid sales fell slightly harder than the sales recorded by automotive and truck manufacturers last year, albeit the importers only accounted for a relatively small slice of the entire market.
Last year, the Chamber of Automotive Manufacturers of the Philippines, Inc. (Campi) and Truck Manufacturers Association (TMA) saw their sales drop 16 percent, their worst full-year decline since the financial crisis in 1998.
A number of factors were responsible for the performance of the industry last year, one of which was the Tax Reform for Acceleration and Inclusion (TRAIN) law, which made most cars more expensive due to higher excise taxes.
Inflation, which industry officials said made consumers more wary of choosing to buy cars over basic needs, pulled back sales as it hit record highs last year.
Avid blamed the weak sales on the “confluence of high inflation, rising borrowing costs, soaring oil prices and tax hikes.”
With new product launches and economic pressures seen abating moving forward, Avid president Ma. Fe Perez-Agudo said the industry should be able to recover this year.
Consumers bought fewer passenger cars and light commercial vehicles last year.
Avid’s passenger car sales dropped 22 percent in 2018 to 30,960 units from 39,721 units in 2017. The light commercial vehicle segment, on the other hand, fell 14 percent in sales to 57,027 units in 2018 from 66,564 units the year prior.
Avid said commercial vehicles segment, so far handled by JAC Automobile International Philippines Inc., sold 713 units last year.
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