2021 barely got started when the Department of Trade and Industry (DTI) made a shocking announcement. If you haven't heard, they will impose a safeguard tariff on imported vehicles from certain countries. Unfortunately, most of our cars come from nations that are not excluded from the cash bond.
It wasn't that long ago when Nissan said they are no longer assembling cars in the country. The Japanese automaker is now part of a long line of automakers that have left local automotive manufacturing. With that, the DTI is urging the public to buy a vehicle assembled in the Philippines. So, what is available?
If we're strictly buying local, there isn't a lot of choices left. If we're talking about sedans and hatchbacks, there's the Toyota Vios, Mitsubishi Mirage, and Mitsubishi Mirage G4. If you need something that can haul seven passengers, there's still the Toyota Innova. And if it's a locally-manufactured SUV you're looking for, the only option is the Foton Toplander. Speaking of Foton, the Thunder is the only pick-up assembled here.
The selections for family vehicles then aren't that wide. But what about commercial vehicles (CV)? The venerable Mitsubishi L300 is still made here, and so are other CVs such as the Hyundai H-100 and Kia Karga. Hyundai also builds the H350 here, along with Foton with their Traveller van line.
Count them all up and it's not a long list. Granted, it doesn't include the medium and heavy-duty trucks and buses, but those aren't for the average consumer. All in all, we have three subcompact cars, three LCVs, two full-sized vans, one MPV, one SUV, and one pick-up that we can say are assembled here. Out of the hundreds of models available in the country, only eleven of them roll out of the country's assembly lines.
Of course, we're not being forced to buy locally-assembled cars only. As consumers, we want the freedom of choice when buying our next car. Besides, the government can't punish you for wanting a car made in Thailand over one that's made in the Philippines. That said, some feel like you're paying a penalty by choosing an imported vehicle. While it won't be the full PHP 70,000 or PHP 110,000 bond on top of the current prices, those additional costs will be passed on to us: the buying public.
However, don't forget that there are some vehicles exempt from the tariffs. These include vans with over ten seating capacity, vehicles assembled in the exempted list, and curiously, most luxury cars. But one way or another, we're expecting prices on most cars to go up this year.
Of course, the DTI's point of view is understandable from the standpoint of local assemblers and parts suppliers. More local manufacturing creates more jobs, and unemployment is kept to a minimum - keeping the economy stable.
But is DTI making the right choice by imposing more tariffs on the automakers and passing that cost to consumers? If the country wants to be competitive in automotive manufacturing; incentives, and not more taxes might be the key.
Just take a look at Thailand.