JUST as hopes of recovery waft in the nippy air—what with the virus-vaccine’s much-awaited arrival—the car world got blindsided by the news of new tariffs that might be imposed soon, mostly on imported vehicles.
Almost every captain in the industry got jolted by it, their reaction almost as violent as the eruption of Mt. Taal almost exactly a year ago.
Anent to this, here’s the continuing smorgasbord of ideas and analyses of what’s to come this year from our shakers and shapers of the local motoring world:
Atty. Alberto B. Arcilla, President & CEO, The Covenant Car Company Inc.
“We will expect aggressive promotions in the first quarter from all brands as all would want to liquidate inventory from 2020 stocks.
“The market will naturally grow as the need for mobility requirements will be more pronounced in the first semester as we await for the vaccine to be released.
“The Car A and B, Small SUV segment will continue to grow as seen in 2020. These segments being a good option for the market that is looking for low priced but well equipped models.
“The market will continue its appreciation of new brands, models and source plants. The strong emergence and growth of new brands since 2019 will be a good foundation for the growth in 2021.”
Froy Dytianquin, General Manager, Sojitz
“Initially, I was looking at three items that 2021 will bring forth to the auto industry: Resurgence, Steady Growth and Stability.
“However, upon getting news about the DTI intending to slap safeguards on auto industry with bigger cash bonds for imported vehicles and eventually leading to higher tariffs later, I believe these three items will change to Sales Rush, Uncertainty and Adjustment.
“The additional bonds the DTI will impose on imported vehicles will not be absorbed by importers and distributors but rather, they will be passed on to consumers.
“So, definitely, price increases loom and we will expect some sort of panic buying before the new prices take in effect.
“Then after it takes effect, uncertainty lurks until the tariff commission whether to recommend or not additional taxes to be imposed. Meantime, there will definitely be a lull.
“Adjustment will then follow as the market tries to adapt to the new prices.”
Tey Sornet, President, Southgatemotors Ventures Corp.
“1. Vaccine will spur growth in the economy, as people can start working regularly again, leading to businesses starting to pick up, giving banks confidence to increase credit approvals.
“2. I forecast a moderate growth in the TIV (Total Inventory Vehicles) to 320k units sold in 2021.
“3. Vehicles priced below P1.2 million will remain the most saleable.
“4. I expect the Top 3 Japanese companies to maintain their positions—Toyota, Mitsubishi and Nissan. But Chinese players like MG, Foton, Geely and Chery would become stronger and pose a significant challenge against the established brands.”
Raymond T. Rodriguez, President, Lexus Manila
“Growth in sales most certainly to happen in 2021.
“Continuous sales promotions spawned by new and exciting models.
“Sustained implementation of safety protocols and social distancing at dealerships is key to survival. No way but up.
“Increase in digital marketing should produce more customers. Online inquiries will be the new normal throughout the year. But test drives will still be key in helping customers decide on their purchase.”
Willy Soong, Automotive icon
“Demand will shrink further.
“Banks’ appetite for auto loans will shrink.
“Many dealerships will carry the biggest brunt of the costs of capitalization.”
Rommel Gutierrez, Vice President for Legal, TMP
“As if the adverse impact of the pandemic is not enough, the decision to impose provisional safeguard measures against imported vehicles is yet another blow to the automotive industry.
“This will further derail the recovery efforts of industry players and stakeholders.
“While Campi supports the development of local vehicle manufacturing, it has consistently opposed the imposition of safeguard duties against imported, completely built-up units or CBUs.
“We project further reduction in sales volume which, in turn, poses risk of employment downsizing, not to mention government revenue losses. This will also encourage revival of gray market/used vehicles.
“With much uncertainty, investments in dealer expansion and parts localization may be deferred.
“The risk in the short term will be disruption in regional production and supply. In the medium to long term, this will further slowdown regional economic growth because of chain reaction to other industrial sectors.
“Furthermore, this could potentially weaken trade and economic relations triggered by retaliation by concerned exporting countries to the Philippines.”
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