Safeguard duties on cars opposed

A group of vehicle importers said they were concerned about an ongoing government probe of their vehicle importation in the past few years, warning that it would deter the flow of new investments into the sector at a time when demand was already low.

The Association of Vehicle Importers and Distributors Inc. (Avid) reported a 48.7 percent drop in its members’ auto sales in eight months to 29,360 units from 57,202 units sold in January to August 2019.

In a statement, Avid expressed concerns about the probe that might lead to the imposition of safeguard duties on imports and result in more expensive vehicles.

The investigation, led by the Department of Trade and Industry (DTI), was prompted by a petition filed by labor group Philippine Metalworkers Alliance (PMA) last year.

PMA wanted the DTI to slap safeguard measures on imported vehicles, saying that the surge in imports had been hurting local jobs.

“Avid is one with the auto industry in calling for government support so we can recover from the impact of this pandemic. We welcome government initiatives that would further open opportunities for investment, create jobs for our workers, provide reliable and affordable mobility for Filipinos,” Avid president Ma. Fe Perez-Agudo said.

“However, we are concerned about the proposal to impose ‘safeguard’ taxes on imported vehicles,” she added.

“Prior to the lockdown, we have conveyed our position that penalizing imports will not trigger investments or address pressing issues faced by the local manufacturing sector,” she said.

“Rather, it is a disruptive measure, which will further inhibit the growth of the automotive industry and reduce our competitiveness in the region,” said Perez-Agudo, who heads Hyundai’s Philippine distributor.

PMA, which represents about 13,000 workers, said imported cars had been hurting local workers in the auto industry, even though the automotive companies themselves do not feel the same impact.

In a global value chain, a car company that cuts its vehicle production so that it can import instead does not feel any significant loss. In the end, the group argued, multinational companies would still benefit, even if they began relying more on imports. Meanwhile, a smaller vehicle production means less work for workers, which could lead to job cuts.

Trade Undersecretary Ceferino Rodolfo told reporters earlier that in 2014, there were only 153,000 brand-new imported motor vehicles in the local market. This, he said, climbed to more than one million units as of 2018.