Vehicle sales slumped 11.8% due to Taal eruption

Automotive companies sold fewer new vehicles in January after Taal Volcano turned violent last month and rained ashfall on assembly plants and dealership networks in South Luzon, car and truck manufacturers said.

A joint report by the Chamber of Automotive Manufacturers of the Philippines Inc. (Campi) and the Truck Manufacturers Association (TMA) showed sales dropping nearly 12 percent last month.

In total, the groups sold only 23,723 units in January, 11.8 percent lower than the 26,888 units sold in the same month a year ago. Campi said the decline was due to Taal Volcano’s eruption at the start of the year.

A favorite tourist spot, the eruption displaced Filipinos who lived near the area and spread ashfall as far as Metro Manila.

Auto companies, which finally saw their sales grow last year after a difficult 2018, were not spared from Taal’s eruption. A number of companies have assembly plants in Laguna province, including Toyota Motor Philippines Corp. and Mitsubishi Motors Philippines Corp.

“Majority of plants and some dealerships located in South Luzon were badly hit by ashfall, [while] also affecting operations in some areas of Metro Manila,” Campi president Rommel Gutierrez said.

“Some companies were also forced to temporarily suspend operations for safety reasons,” Gutierrez, who is also a top official at Toyota, said.

Campi and TMA sold nearly 370,000 units last year, managing a 3.5-percent growth as they move to recover the momentum they lost in 2018 when the industry suffered from a huge drop in volume sales after demand fell under the weight of the Duter­te administration’s higher tax and inflation.

Now, new problems are in the horizon since imported vehicles from certain countries in Southeast Asia might eventually become more expensive. The Department of Trade and Industry (DTI) is investigating the claim of a labor group that local automotive jobs were harmed because of too many imported vehicles in the past few years.

The DTI is also considering to slap tariffs on vehicles imported from Thailand, a retaliation prompted by a longstanding trade dispute that involves one of the world’s biggest cigarette makers.