Don’t blame it on TRAIN



The slide in total car sales for the first half of 2018 cannot be solely attributed to the TRAIN law, a group of major automotive companies said recently.

The Association of Vehicle Importers and Distributors led by Hyundai Asia Resources Inc. said there are other important factors that have played into the waning of car sales this year.

In its regular quarterly report, AVID said its sales momentum slowed by 11 percent, reporting only 43,138 units sold in the first half of 2018, down from 48,344 units sold for the comparable period in 2017.

AVID President Ma. Fe Perez-Agudo said: “The consumers are still adjusting to new income and new commodity price levels.”

“We see this as a transitionary period and may soon normalize as both supply and demand factors stabilize,” Perez-Agudo explained.

The AVID report considers factors such as higher petroleum prices that have raised the total cost of owning vehicles and the indirect impact of higher interest rates that affect buyer preferences and priorities as some of the leading causes of the vehicle sales drop.

Another reason is some customers have also advanced their purchases late in 2017 to take advantage of the lower prices and interest rates.

“Still, the association expects the effects of the TRAIN law to be short-term and transitional, foreseeing that the need for vehicles will continue to rise and that the market will eventually adjust to the new tax regime,” according to the report.

AVID said the additional excise tax had immediate impact on the Passenger Car and Local Commercial Vehicle (CLCV) segments, however, tax exemptions on hybrid and electric vehicles placed them in a favorable position to break into an emergent market. The report also claimed that the new tax bracket on luxury vehicles is expected to make that segment very competitive.

The AVID group sold a total of 16,176 units of passenger cars from January to June in 2018 as against the 18,769 units sold from the previous year, a decline of 14%. The volume continues to be mainly driven by Hyundai as it recorded 10,838 units sold in the first six months of the year.

On the other hand, local commercial vehicles sales went down by 10 percent across all segments with the exception of pick-ups as these are exempted from paying excise taxes under TRAIN. The segment hit 26,528 units sold in 2018 versus the 29,575 units sold in the first semester of 2017. Ford continues to dominate the LCV segment, selling a total of 12,155 units.

Representing AVID’s Commercial Vehicle Segment, JAC Automobile Int’l Philippines Inc. sold 434 units from January to June 2018. AVID welcomed JAC Automobile Int’l Philippines Inc., the exclusive distributor of JAC models – light and heavy vehicles, bus, coach and heavy equipment, into its fold in May 2018.

AVID is composed of car importers and distributors that are mainly non-members of the more dominant Chamber of Automobile Manufacturers of the Philippines Inc. or CAMPI.

Its members are Geely, Auto Nation Group (M-B, Jeep), British Bespoke Automobiles (Rolls Royce), British United Automobiles (Lotus), The Covenant Car Company (GM/Chevy), BDPhils Motorsports Inc. (Aston Martin), Focus Ventures (FAW), Ford, Hyundai, Jaguar, Subaru, PGA Cars, Scandanavian Motors (Volvo), Suzuki Phils. and the United Asia Automotive Group (Foton).

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