Car sales skid to 7-year low with tariffs dimming prospects
MANILA, Philippines — A typical surge in demand during the holidays gave car sales a last-minute push in the final month of 2020, but it was not enough for the industry to beat last year’s watered down projection. This year may not be any better because of tariffs.
Car manufacturers sold 27,596 units in December, up 19.1% from November’s sales, a joint report by the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and Truck Manufacturers Association showed on Thursday.
But compared to the same period last year, auto sales plummeted for the tenth consecutive month by 18.1%.
For all of 2020, CAMPI members sold 223,793 units, down 39.5% year-on-year and was the lowest since 2013 when manufacturers sold 181,283 units. Total sales also fell below the 240,000 lowered forecast for the year.
“It is noteworthy that the holiday season has contributed to the uptick in demand for auto sales in December amid the improving business and consumer confidence,” CAMPI President Rommel Gutierrez said in a statement.
A struggling auto industry paints a bleak picture for the the Philippines' consumer reliant economy as weak demand for vehicles may signal the same for other durable goods.
Gutierrez said in a Viber message that the industry is yet to adopt an official forecast for the year, but regardless, that projection would be difficult to meet after government decided to impose additional tariffs in imported cars.
While CAMPI members do manufacture cars in the Philippines, a huge chunk of their output are now imported from countries like Thailand and Indonesia. The trade department recently slapped safeguard duties on cars supposedly to protect local firms, but CAMPI said the new levy would instead hamper recovery.
The tariff would require car importers to cough up cash bonds of up to P70,000 for passenger cars and P110,000 for light commercial vehicles. It would be in effect for 200 days that started January 5, unless reversed by the Tariff Commission.
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