With the Trade and Industry’s imposition of P70,000 to P110,000 safeguard duty on imported passenger cars and light commercial vehicles, Sojitz G Auto Philippines (SGAP) announced that there is still chance to buy their popular models, the Coolray, Azkarra, and Okavango at their old prices.
The importer and distributor of Geely vehicles in the country said the imminent price hike will not be immediately implemented.
“The new safeguard tariff will eventually raise prices of Geely vehicles for new shipments which will arrive this month. The good news, however, is that our customers can still enjoy the current prices since we, the distributor and our dealers still have enough inventory,” announced SGAP president and CEO Mikihisa Takayama.
The price increase will have to be imposed after the Bureau of Customs recently issued a Customs Memorandum Order (CMO) acting on the Trade and Industry’s directive to add safeguard tariff on the majority of imported vehicles.
Early this year, the DTI has decided to further tax most of the imported vehicles, which according to Trade Secretary Ramon Lopez, “will provide a breathing space to the domestic industry” with the intention to protect workers in assembly and manufacturing plants.
The move however, is seen by many to only add burden on an already struggling automotive industry. Last year, the global pandemic has sent the the industry into a tailspin as auto sales dropped by 40.26 percent, based on Chamber of Automotive Manufacturers of the Philippines Inc., Truck Manufacturers Association, and Association of Vehicle Importers and Distributors Inc.
Only 248,171 units were sold, which is a huge decline from the 416,628 units sold in 2019, the year when the industry was just recovering from the impact of Tax Reform for Acceleration and Inclusion Law that took effect in 2018.
Last year’s figure was at its lowest since the Philippine automotive industry began its sales surge in 2014.
Under RA 8800, or the Safeguard Measures Act, the DTI shall impose “a provisional safeguard measure in the form of a cash bond amounting to P70,000/unit for passenger cars/vehicles under AHTN Code 8703 and P110,000/unit for light commercial vehicles under AHTN Codes 8704.21.19 and 8704.21.29.”
Furthermore, DTI said the provisional safeguard measure will run “while the case is under formal investigation by the Tariff Commission for a period of 200 days” from the day of the issuance of the BoC’s CMO. The DTI’s move to slap additional safeguard duties on most of the imported vehicles was done in response to the petition submitted by the Philippine Metalworkers’ Alliance that sought to save local vehicle assembly operations.
Takayama said “It is unfortunate that such policy was decided to be implemented at a time when the auto industry is expected to recover from the huge drop in sales volume last year due to the pandemic. In spite of this, SGAP is still optimistic that the auto sales for this year will make a rebound. We also hope that the market can adjust to the new higher prices this policy will bring.”
Meanwhile, SGAP has yet to announce the price adjustments on its vehicles.
Charles E. Buban is an old timer in the Philippine automotive journalism scene. He first started covering the automotive beat in 2003, writing news and reviews of new models and car tech, among other car-related stuff. When not writing about cars, he could often be seen riding his mountain bike or doing long walks in the hope of catching a couple of legendary Pokemons.