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Economy

Car importers expect flat to 20% sales growth

By Jenina P. Ibañez, Reporter

IMPORTED car sales in 2021 could span between flat to 20% growth, which could depend on the government’s final decision on safeguard duties, Association of Vehicle Importers and Distributors, Inc. (AVID) President Ma. Fe Perez-Agudo said.

The Trade department slapped 200-day provisional safeguard duties on imported cars to protect local jobs after it found a link between a decline in local industry employment and an import surge, based on a petition from an auto parts labor group.

“The best scenario is we will still achieve 20% growth this year with or without safeguard measures,” Ms. Agudo said at a BusinessWorld Velocity online event on Tuesday.

“The worst scenario of course will be, there will still be a flat growth this year, coming of course from a very low base last year.”

AVID reported a 41% sales drop to 51,719 units in 2020 compared with the 87,169 vehicles sold in 2019 due to the lockdowns declared to contain the pandemic and weak consumer demand.

In February 2021, imported car sales declined 15% to 5,401 vehicles compared with 6,342 in the same month last year, although month-on-month sales increased by 3%.

The industry expects a slowdown during the 200 days the duties are applied as the companies await the results of the Tariff Commission’s investigation, Ms. Agudo said. Car companies have started raising prices as they collect deposits for imported cars during the provisional period.

“At the same time, [we’re] calibrating our options as most industry players are doing right now, because the real impact if this is passed would still be felt probably by the last quarter of this year when, really, we have already zero inventory of the pre-safeguard tax measure pricing,” Ms. Agudo said.

“But I still go for the positive outcome because people would still continue to need mobility.”

Ms. Agudo said that some passenger car sales remain strong as consumers buy low-ticket or cheaper units.

“I could see traction going to utility vehicles because it will provide both support for transportation of people and cargo transportation,” she added.

Similarly, Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) President Rommel R. Gutierrez said that the industry group expects 30-35% growth this year, but that projection could drop to 20-25% if the duties derail recovery efforts. The recovery of the car industry to pre-pandemic sales, he said, could be as late as 2023.

The Safeguard Measures Act or Republic Act No. 8800 allows domestic producers to ask the government to conduct an investigation into their import competitors if they claim to have been injured by excessive imports.

Workers group Philippine Metalworkers Alliance, which had petitioned for the safeguards, said that the duties are not enough to save the industry. The group said that the government must revisit its car industry development program and address the high costs of power and transportation.

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