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TRAIN halts Philippine auto sales growth, slumps to 2nd worst in Asean in Q1 2018
MANILA, Philippines — The new tax reform law took its toll on vehicle sales in the first three months of the year, relegating the Philippines to second worst performer in Southeast Asia during the period.
The Philippine automotive industry was the second fastest growing market in ASEAN during the first quarter of 2017.
But based on latest data from the ASEAN Automotive Federation, the country posted the second biggest decline in vehicle sales among eight economies in the region monitored from January to March this year.
Philippine auto sales slipped 8.5 percent in the first quarter, the second steepest behind Singapore’s 26.4 percent sales plunge.
It should be noted, however, that Philippine vehicle sales figures used by the ASEAN Automotive Federation are only those from the Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI) and the Truck Manufacturers Association, which account for 80- to 90-percent of the local market.
Myanmar was still the region’s fastest growing automotive market with a 92.6 percent sales increase year-on-year, followed by Thailand which registered growth of 12.6 percent during the quarter, and Indonesia with a 2.9 percent uptick.
The slowdown in the country’s vehicle sales during the first three months was mostly attributed to the Tax Reform for Acceleration and Inclusion (TRAIN) Law, which included the implementation of higher automobile excise taxes.
CAMPI president Rommel Gutierrez earlier said the decline in sales in the first quarter was not unexpected, noting that the impact of the change in excise tax rates under the TRAIN Law was anticipated for this particular period.
Aside from sales, vehicle production in the country also nosedived by 37.8 percent in the first quarter to 22,496 units from 36,194 units last year.
The Philippines was the only market among six Southeast Asian economies with substantial local vehicle production that recorded a decline during the three-month period.
Motor vehicle production in Malaysia, Myanmar and Thailand each grew double digits.
Overall, vehicle sales in the region improved 1.9 percent year-on-year to 835,215 units, while vehicle production rose 7.3 percent to 1.09 million units.
Automotive players in the country are confident the market will adjust and improve in the coming months, after reeling from the impact of the higher excise tax in the early part of 2018.
Source: https://www.philstar.com/business/2018/05/02/1811235/train-halts-philippine-auto-sales-growth-slumps-2nd-worst-asean-q1-2018#JxbBK2qMjoX6rEHu.99