Automotive sales contracted in February, as the new tax regime that raised excise taxes on vehicles began to bite particularly the passenger car segment.
Sales of automobiles fell 3.2% to 26,176 units last month from 27,040 a year ago, according to the joint report from the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and Truck Manufacturers Association (TMA).
Vehicle sales were flat in the first two months of 2018, squeezing out a gain of 0.6% to 57,821 units from 57,465 units in the same period last year.
Another domestic auto industry group, the Association of Vehicle Importers and Distributors, reports its member companies’ sales separately.
“The slight decrease in February sales compared to the same period last year suggests that the market is still adjusting to the new excise tax regime. Sales prospects remain positive as demand continues to be strong,” Rommel R. Gutierrez, president of CAMPI and a first vice-president at Toyota Motor Philippines (TMP), was quoted in a statement as saying.
Signed into law by President Rodrigo R. Duterte in December, the Tax Reform for Acceleration and Inclusion — that increased taxes on automobiles, fuel, minerals, various investment products, and a host of other items, besides imposing new levies on sugar-sweetened drinks and others — took effect at the start of the year.
With the higher excise tax, vehicle sales in January have started to display signs of weakness, growing at a slower 4% pace following a spike in December when the industry sales surged 33.4% before the new taxes took effect.
In the first two months of 2018, Toyota Motor maintained its dominance in the Philippines with a market share of 39.84%. It was followed by Mitsubishi Motors Philippines Corp. with a share of 22.17%. Ford Motor Co. Philippines, Inc. came out third with a 7.95% share.
Honda Car Philippines Inc. and Nissan Philippines, Inc. round out the top five with a share of 7.16% and 6.5%, respectively. — Krista Angela M. Montealegre