Weak sales continue to hound automotive industry

Car and truck companies sold a total of 23,380 units last January, slightly fewer than the number of units they sold when operations first got disrupted by the Taal Volcano eruption in the same month last year.

This is according to data from Chamber of Automotive Manufacturers of the Philippines Inc. (Campi) and Truck Manufacturers Association (TMA) sent to reporters on Thursday. Despite the small decline, Campi said this was “a positive sign that the industry is slowly recovering” from the twin shocks brought about by the volcano eruption and the COVID-19 pandemic in 2020.

In January last year, Campi and TMA sold just 23,723 units. Sales dipped 12 percent as the eruption that month forced car companies to stop operations for a time.

Cautiously optimistic

For January 2021, passenger car sales increased 11.5 percent to 7,295 units. Sold commercial vehicles, which account for nearly 70 percent of the market, reached just 16,085 units, or a 6.4-percent drop.

Moving forward, Campi president Rommel R. Gutierrez said they remained cautiously optimistic.

“The pandemic still poses a challenge to the automotive industry. We are also monitoring how the market will react with [regard to] the imposition of the provisional safeguard duties starting February, which could potentially impact the prices of imported motor vehicles,” he said in a statement.

The government imposes safeguard measures if the local industry suffers—or is at least threatened by—massive losses from a surge in imports.

The Department of Trade and Industry (DTI) could do this under the Safeguard Measures Act, a law passed during the Estrada administration in 2000.

The DTI, through a Bureau of Customs order, imposed provisional safeguard duties of P70,000 for a unit of passenger car and P110,000 for a light commercial vehicle. The order would remain in effect for 200 days, unless extended by authorities.

Unlike previous safeguard measures, this move was not supported by local big players. For the first time, the government sided with unionized workers, in particular the Philippine Metalworkers Alliance, which filed a petition in 2019.