It's a matter of tax

Since its introduction in the Philippine market in mid-2020, the Territory has been a consistent best seller of the Ford brand.

Even though they only offered 2 variants amidst a pandemic giving the economy a lot of problems, the Territory sold well. Even if there were many who doubted a Ford-badged model that comes from China, it sold well. Yes, the Territory for the Philippine market is a rebadge (with a slight redesign) of the Yusheng S330 from Jiangling Motor Corporation or JMC; one of Ford’s partners in China.

The price proved to be the ticket for Ford because when they launched it in 2020, the Trend variant retailed for PHP 1,179,000 while the Titanium+ had a retail price of PHP 1,299,000. The prices were kept fairly consistent, and Ford Philippines racked up 20,000 unit sales with the Territory in less than three years.

Ford Territory more expensive image

Now there’s a new generation Territory in our market and in two variants: Titanium and Titanium X. Ford didn’t opt for a Trend variant anymore. The vehicle also comes with an improved version of the 1.5L turbo engine, as well as a new 7-speed wet dual-clutch transmission that is being officially referred to in the brochure as just a 7-speed automatic. There’s no way they will use the Powershift name here.

The new Territory is still made through the partnership with JMC, but it seems Ford had more input in the design and development phase. And it’s actually based on something called the Equator Sport; a smaller version of the three-row Ford Equator sold in China and other markets.

There is a question that many are asking regarding pricing: Why does the Territory Titanium X cost PHP 264,000 more than the Titanium?

It is highly unusual for a high-grade/top-of-the-line vehicle in the same model range with the same engine and drivetrain to cost nearly 20% more than its entry-grade variant; if we can really call the Titanium an entry-grade version. The addition of a panoramic roof, power tailgate, some extra electronic safety features, and a slightly larger wheel size hardly justifies such a big jump in price, especially considering that the price stability of the Territory has been one of its strongest suits in our market.

Ford Territory more expensive image

We had our theory, and we got the confirmation of it when we spoke with Mike Breen, Ford Philippines Managing Director: the answer is tax. Specifically: the Titanium X variant crossed over (no pun intended) to the next higher excise tax bracket.

While vehicles imported from China with a 1.5L engine benefit from negligible import duty (which is why Chinese brands focus on just 1.5L engines models with turbo and hybrid tech), there is still an excise tax bracket to deal with that is based on the NMISP (Net Manufacturer’s Importer’s Selling Price) or what is effectively a dealer price or wholesale price. If the vehicle’s NMISP crosses a certain bracket, there is a big jump in tax.

While we cannot confirm the NMISP (it’s a closely guarded secret of the brands), we can figure it out based on pricing. Our theory is that the NMISP of the Titanium variant is on the higher side of the PHP 600,000 to PHP 1,000,000 bracket which would incur a 10% excise tax. The NMISP of the Titanium X would have been a little over PHP 1,000,000 because that would incur a 20% excise tax.

Ford insiders did tell us they tried their best to bring the Titanium X into the same bracket as the Titanium, but it just wasn’t feasible. The good news for Ford is that a lot of customers are liking the Titanium X variant and its features (especially the sunroof) even though they’re not enjoying the big jump in price.