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April 13, 2018

UPDATED: New Excise Tax Reveals Auto Industry Winners and Losers

UPDATE: Vehicle importers (AVID) also suffers loses for Q1 2018 (4/19).

The Tax Reform for Acceleration and Inclusion (TRAIN) (aka the revised excise tax law) has finally reared its ugly head as evidenced in the Q1 2018 joint CAMPI-TMA sales report. The Chamber of Automotive Manufacturers of the Philippines (CAMPI) and the Truck Manufacturer’s Association (TMA) reports that new automobile sales are down 8.5 percent year-to-date (January to March 2018 versus January to March 2017).

In a statement CAMPI President Atty. Rommel Gutierrez said: “The decline in sales in the first quarter of 2018 is not unexpected. The impact of the change in excise tax rates under the TRAIN law was anticipated for this particular period. We remain confident that market will improve in the coming months.”

In year-to-date terms, almost all automobile categories have been hit hard with AUV (18.7 percent), Passenger Car (9.5 percent), and Commercial Vehicle (8.0 percent) segments all in the red.

An even more worrying sign is the drop in Light Truck sales. Considered the backbone of small and medium enterprises, Light Truck sales are down a whopping 39.2 percent year-to-date compared to the same period in 2017.

That said, the automotive industry is slowly recovering from the effects of TRAIN. Comparing March to February 2018 sales show that that overall volume is up 7.8 percent. In fact, all but the AUV and Commercial Vehicle segments are up. The AUV segment dropped 28.6 percent while the Commercial Vehicle segment dropped 3.9 percent.

Overall, Toyota Motor Philippines maintains its leadership of the automotive industry commanding a 40.03 percent of total CAMPI-TMA sales. However, it’s worth noting that its 34,440 year-to-date unit sales equate to a 15.4 percent drop compared to the same period in 2017.

Meanwhile, second-place Mitsubishi Motors Philippines Corporation has managed to grow to a 22.73 percent market share (19,554 units) versus 17.56 percent a year ago.

Mitsubishi’s fortunes came at the expense of third-place Ford which sees year-to-date sales drop by 17 percent to 6,448 units. They were particularly hit in March with sales remaining flat. Shockingly, Ford’s March 2018 figures are 50.7 percent lower compared to March 2017.

As the first automaker to announce a price hike due to the revised excise tax, fourth-place Honda Cars Philippines sees cumulative January to March 2018 sales drop 16 percent to 6,180 units while fifth-place Nissan Philippines sees a 9.6 percent uptick in sales to 5,783 units.

The most worrisome situation though has to do with the automotive brands handled by the Alvarez Group of Companies. Sales at Kia (Columbian Autocar Corporation) and Peugeot (Eurobrands Distributor, Inc.) are down 54.1 percent and 64.1 percent respectively. Meanwhile, BMW, which is now under San Miguel Corporation control at least sees its sales remaining steady at 120 units, although March sales are down 60.6 percent compared to in February.

Top 10 Year-to-Date Vehicle Sales (as of March 2018)
  1. Toyota Motor Philippines (-15.4 percent)
  2. Mitsubishi Motors Philippines Corporation (+18.4 percent)
  3. Ford Motor Company Philippines, Inc. (-17 percent)
  4. Honda Cars Philippines, Inc. (-16 percent)
  5. Nissan Philippines, Inc. (+9.6 percent)
  6. Suzuki Philippines, Inc. (+21.4 percent)
  7. Isuzu Philippines, Inc. (-41.8 percent)
  8. United Asia Automotive Group, Inc. / Foton (+16 percent)
  9. Bermaz Auto Philippines, Inc. / Mazda (-8.2 percent)
  10. Hino Motors Philippines Corporation (-20.8 percent)


  1. those greedy b*stards... serves them right... all they care about is profits but now sales are dwindling... lets see what gives!

  2. It's about time toyota gets that slip, their choice of features & appointments in their products has been really a big insult to filipino buyers, their vehicles are just overpriced - banking on their image as a reliable brand.. true they are but they're not the only one. All you get is a nice model nameplate, but compare it to competition in terms of materials, ride quality, features, etc. more often you get less with a toyota.. honda phils has been following toyota's approach in terms of price to value tactics as well, some of their past models are seriously underdressed..

  3. enlightening write up. Sir Uly, would it be possible to get a whole list Vehicle Sales per brand (including cars outside of campi)? Curious how the others did (hyundai, subaru, etc..... Thanks!

  4. I hope sir Uly would include all car manufacturers, for us to see the whole picture.

  5. Why not try to subsidize the tax. Some beverage companies able to subsidize the sweetened beverage tax..

  6. Losses in everyday traffic vs the entire losses in their sales.

  7. LMAO at this greedy car companies most especially Toyota, the greediest of them all. I hope the drop in their sales drag them down further.

    It's just sad that we have expensive cars here in the PHI as compared to other countries, we can't enjoy em high end cars even if we can buy them if in equivalent to prices abroad.

  8. That's what you get when people are ignorant. Toyota and Honda specifically has been fooling fools for a long time now. Overpriced vehicles for their level of equipment.

  9. Honestly, just within the confines of the automotive industry, I would say this is great!

    Isn't it that one goal of the TRAIN Law is to minimize vehicle sales to somehow alleviate traffic congestion? So again, I must say this news is great.

    Secondly, the consequence of this situation is hopefully make the dealers less greedy in jacking up their profit margins; or at least pump up their other-than-sales offerings so as to attract buyers still > just as how Ford did with lower ownership costs of some in their line up.

    I do hope the effects of the TRAIN Law in the automotive industry moves on to be in favor of the customers, both existing and upcoming. Cheers!

    1. One of the most logical comment i've seen lately. Kudos to you brother!

    2. TRAIN wasn’t supposed to lessen traffic, but law makers did say that it’s a welcome side effect. TRAIN is meant to fund the government’s Build Build Build program without having to increase taxes on the marginalized and poor.

      As for emphasizing the other aspects of the business...carmakers and dealers don’t earn as much as you think. In our excise tax scenario, we stuck with a 14 percent profit margin split between them. And the fact that we got the pricing close means this holds true.

      Dealers actually stand to earn more in allied services such as repairs, insurance sales, financing, etc.

      Hope this clears this up.

    3. Um nope, people will instead buy a wigo instead of a vios for example. So people will have to contend with inferior cars due to the higher tax. So the people still lose having an inferior car plus higher fuel taxes. It won't reduce traffic that much.

  10. I hope the additional increase in fuel prices take effect soon too particularly diesel. This will surely eliminate more vehicles from the road. Only important errands and the rich will drive... the belching will be lessened too!

  11. sir Uly wound'nt the goverment lose more tax revenues if the volume of cars bought decreases? mataas nga ang taxes but konti nalang bumibili. They need to study this law again. This will discourage car manufactures to produce their cars here. Thats why we are being left behind by Thailand!

    1. Actually, I did some math before in a previous story. Even if car sales go down by 60 percent this year, all things equal, the government still stands to collect more under TRAIN.

      What the government didn't realize is the drastic effect TRAIN has on things like fuel.

  12. Build Build Build? i dont see anything being built? Puro patayan lang at loan loan loan sa China!


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