The Market Monitor Minding the Nation's Business
Local automotive manufacturers and importers will review their vehicle pricing scheme while adjusting industry sales targets for 2018, after a experiencing a slump in sales in the first half after the implementation of a new tax law and the weakness of the peso.
Dante Santos, president of Truck Manufacturers Association and vice president of the Chamber of Automotive Manufacturers of the Philippines said senior officials of both groups want a second review of the first-semester prices and sales.
“All of us are under review. What is under review is the pricing. Pricing as an element of forex, interest rate and other peripheral cost,” said Santos who is also vice president of Mitsubishi Motor Philippines Corp.
Santos said his company might also impose a new price matrix for every model and variant.
He said Mitsubishi did not make any price adjustment when the first stage of the Tax Reform for Acceleration and Inclusion law was implemented in January.
The fluctuation of the peso against the US dollar also affected the company’s performance. He said there was a need to check and verify some foregone revenues because of the forex movement.
Santos said the peso had weakened considerably and was now a cause of concern among completely build-up unit importers like Mitsubishi.
“We’re expecting that the forex will not move up anymore, not more than P54 to a dollar. Some of us are not moving upward, some have stabilized [their prices], while some are waiting for the right moment to move up,” he said.
The marketing committees of Campi and TMA are set to meet soon to review the previous semester’s sales and the forecast for the rest of the year.
Both earlier agreed to a growth target of a flat to 4% increase in volume, but those numbers were elusive so far, Santos said.
“The original outlook was not that big a growth. But there are elements that happened like Train. Recognizing these elements, we don’t feel like there’s going to be a big growth like before. In the past, we’re growing by 30 to 35%. There are brands that have submitted revised projections. But we have a gentleman’s agreement not to disclose anything until the meeting,” Santos said.
Data showed that vehicle sales plunged 12.5% in the first half to 171,352 units from 195,772 units sold in the same period last year.
Santos said Mitsubishi maintained its ranking as the second biggest automotive firm in the Philippines with a 16.56% market share as of June.