Motoring Today Column

Jan 13, 2021

The so-called provisional safeguard duties in the form of a cash bond imposed on imported passenger cars and light commercial vehicles spawned many questions mainly from the ordinary folk.

The Department of Trade Industry (DTI) said it imposed this cash bond on imported vehicles - P70,000 forpassenger cars and P110,000 for light commercial vehicles - in light of findings that "increased importation of passenger cars and light commercial vehicles is a substantial cause of serious injury to the domestic motor vehicle manufacturing industry."

The findings stemmed from investigation into a petition filed by Philippine Metalworkers' Alliance, which is a national union of automotive, iron and steel, electronics, and electrical sectors, including affiliates composed of key players in the automotive industry, the DTI said in press statement.

Of course this new imposition, albeit in the form of cash bond, met with shocked and violent reactions from members of the Association of Vehicle Importers and Distributors (AVID) who were apparently blindsided by the DTI's decision.

The DTI defended its decision by citing findings showing "imports of passenger cars have increased by an average of 35% during the period of investigation (POI) from 2014 to 2018 while the share of imports relative to production showed that imports exceeded domestic production from 295% in 2014 to 349% in 2018."

The same was true for imports of light commercial vehicles which significantly increased from 17,273 units in 2014 to 51,969 units in 2018, it said.

The DTI also emphasized that the "discontinuation of the production of Isuzu D-Max in July 2019 and the assembly plant closure of Honda Cars Philippines in the first quarter of 2020 affected local jobs and the Philippine economy."

The DTI may have good reason to impose the new "safeguard duties" on vehicle imports. Still the ordinary folk, those who buy vehicles, only have one question in mind. How will this affect retail prices of vehicles?

The obvious answer is yes even though the DTI held out the possibility that, defined as cash bonds, these could be returned to vehicle importers depending on the findings of formal investigation by the Tariff Commission.

Others are suggesting other motives for the new duties. Is the cash-strapped administration again using the auto industry as a cash cow?

The auto industry appeared to be coping well while under the pandemic and had generated good sales when the economy began to open up with aggressive pricing and marketing strategies. And maybe government felt that the industry and the market can stand to absorb more taxes.

Others are asking if government has factored in how making imported vehicles more expensive would affect sales. Will this dampen sales? Will dampened sales mean less revenues and tax collection?

But the bigger question is: Will these safeguard duties lead to automakers who had stopped assembling cars locally get back to restart factory operations?

Still the biggest question the ordinary folk are asking: Is it the time to buy vehicles while auto importers and distributors are deciding on how to react to the new duties?

Honda Extension

Honda Cars Philippines, Inc. (HCPI) may be giving car buyers a chance to own a Honda before the holiday promos end and before the prices rise because of the new duties on vehicle imports.

Honda has extended its holiday promotion entitled "Feel the Magic this Holiday Season" which features different new cash discounts, exciting deals and special offerings from January 1 to 31, 2021.

"This January, we aim to welcome this year full of hope and optimism through extending all our best deals and exclusive offers for our dear customers," said Masahiko Nakamura, HCPI president.

MB's January Treat

Perhaps January is also a good month for driving home a Mercedes-Benz. It may no longer be as affordable especially with the looming duties on imported cars.

Mercedes Benz Philippines announced great deals for January that include as much asP600,000 off on E 200 AMG, and P400,000 off on the V-Class.

Looking for Abegail

Some owners name their cars. This includes Miss Universe Philippines 2020 Rabiya Mateo who named her brand new MG 25 Alpha Crossover SUV "Abegail."

After getting the keys to her red MG ZS Alpha, Ms. Mateo said: "As Miss Universe Philippines I travel almost every day, and I'm very happy to do so now in my comfortable and stylish ZS. I'm excited for all the extraordinary trips my ZS and I will take together, and all the possibilities to see even more of our beautiful country."

Many should now be looking for Abegail on the road.

Happy Motoring!!!

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