When the new tax law came into effect in January, we knew it would make some sweeping changes in the domestic auto industry.

It was a given that sales would drop given the taxes, but more so because many customers that would have purchased cars in 2018 moved heaven and earth to be able to buy it on or before December 31, 2017. But one thing we couldn't really say with certainty was how the excise taxes, particularly the special provisions granting hybrids and full electric vehicles veritable tax shields of 50% and 100% respectively, would affect their sales.

Gauging the sales performance of electric vehicles will be tricky given the lack of charging stations, but we can get an answer in the case of hybrids, at least in the case of Lexus.

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According to Mr. Raymond Rodriguez, the president of the flagship Lexus Manila, Inc. (LMI) dealership under Lexus Philippines, the new excise tax law has made their hybrid models far more attractive to their clients.

Based on the composition of the sales of Lexus Manila on model lines with hybrid variants, the story is clear. Out of the Lexus NX small crossover model range, hybrid sales now account for 16%. In the Lexus RX crossover range, 21% of total sales are hybrids. With the flagship saloon Lexus LS, 41% of units sold are hybrid. 

These year-to-date percentages are a stark contrast to the minimal sales of hybrids since Lexus Philippines started offering them.

The reason is that the 50% tax break on the normal excise rates had enabled the brand to effectively lower the prices of hybrids. Pre-TRAIN, hybrid variants were much more expensive than their internal combustion counterparts, making them a rarity, but the TRAIN has given Lexus the leeway to price their hybrids to more closely match (or even beat) the SRP of the range-topping model gasoline (Lexus Philippines doesn't officially sell diesel models).

In the NX model range, the top-spec NX 300 F-Sport is priced at PhP 3.558 million, but the NX 300h is slightly under at PhP 3.528 million. In the RX, the top-spec RX 350 F-Sport is at PhP 4.798 million while the RX 450h is just a little over at PhP 4.948 million. In the case of the LS, the LS 500 luxury saloon retails for PhP 9.088 while the LS 500h undercuts it at PhP 9.078 million.

Would you consider a hybrid Lexus as your next purchase?