The Department of Trade Industry's (DTI) move to put a safeguard bond on all imported vehicles has already caused a commotion in the auto industry. With affected vehicles set to be levied a cash bond ranging from PhP 70,000 – PhP 110,000, automakers are likely to adjust their prices. The measure is expected to heavily impact the still struggling Philippine auto industry.
Ma. Fe Perez Agudo, president of the Association of Vehicle Importers and Distributors (AVID) Inc., expressed her disappointment on the DTI's move against imported vehicles, as it will affect the recovery of the local auto industry.
“The move to impose provisional safeguard measures on imported vehicles is like pulling the rug from under the auto sector that is still struggling to get back on its feet with a 40% drop in sales in 2020. This further dampens the recovery outlook of the industry at a time when all players and stakeholders are appealing for government support,” said Agudo.
She added that the safeguard measures set to be imposed will aggravate the already anemic demand which will make it harder for consumers to buy a new car with the projected price hike. Fe Agudo herself leads Hyundai Asia Resources Inc (HARI), and Changan Motor Philippines Inc (CMPI) – of which both import vehicles from Korea and China, respectively.
Agudo has called for alternate, long-term solutions that will help improve the ease of doing business in the country. That way, it will help open more opportunities for investments, create jobs for locals, and provide Filipinos with reliable and affordable means of transport.
“AVID has always aimed for the long-term development of the automotive sector, including the advancement of manufacturing as an inclusive means for growth. We have clearly and consistently expressed our position that penalizing imports will not trigger investments or create more jobs, much less address issues on the regional competitiveness of our local manufacturing sector,” added Agudo.
With the price hike expected to be passed on to the consumer, the safeguard bond will not only affect every automaker's sales projections, but it may also result in the industry not being able to recover after last year's huge dip in sales. While the DTI's goal is to safeguard the country's local automotive manufacturing (or what's left of it), it might result in the auto industry becoming less competitive in the long run.