SALES OF imported vehicles in the first half fell 11% year-on-year amid higher excise taxes and fuel prices, with a rise in interest rates also dampening vehicle purchases financed with loans, the Association of Vehicle Importers and Distributors (AVID) said.
AVID is the auto industry association whose members import their products and do not assemble in the Philippines. Its members include car brands at all price points as well as commercial vehicle distributors, and its results reflect the strength of the market for economy and high-end vehicles as well as trucks, which are considered investment goods for business buyers.
In a report issued on Wednesday, AVID said sales in the six months to June hit 43,138 units, down 11% from a year earlier.
The sales include 16,176 cars, down 14% from a year earlier. The leading AVID-affiliated car brand was Hyundai Motor Co., which accounted for 10,838 units.
Sales of light commercial vehicles (LCVs) also fell across all segments except for pickup trucks, which are exempt from excise taxes under the Tax Reform for Acceleration and Inclusion (TRAIN) law. LCV sales dropped 10% year on year to 26,528 units.
Ford Motor Co. was the top AVID seller in LCVs at 12,155 units.
In commercial vehicles, JAC Automobile International Philippines, Inc. was the only member to report results, booking sales of 434 units during the period.
JAC distributes light and heavy vehicles, buses, coaches and heavy equipment.
On Tuesday, AVID’s counterparts who assemble locally — the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and the Truck Manufacturers Association (TMA) — reported jointly that their vehicle sales in the first half of the year totaled 171,352 units, down 12.5% year-on-year.
AVID said the decline in its sales cannot be attributed to TRAIN alone, whose effects the group expects to be “short term and transitional,” with demand eventually adjusting to the tax regime.
It added that excise taxes have had a clear impact on cars and LCVs. However, exempt categories like hybrid and electric vehicles are viewed as an opportunity for the industry.
AVID also cited higher petroleum prices and the impact of higher interest rates as affecting sales.
“Consumers are still adjusting to new income and new commodity price levels. Nevertheless, we see this as a transitionary period and things may soon normalize as both supply and demand factors stabilize,” Ma. Fe Perez-Agudo, president of AVID, said in the statement.
AVID is counting on a robust economic outlook and strong private consumption to buoy auto demand. — Janina C. Lim