As expected, the new tax reform law, or the Tax Reform for Acceleration and Inclusion (TRAIN), is causing an overhaul of the pricing structures of all the players in the Philippine auto industry. The accounting and product planning divisions of car manufacturers, official importers and distributors are all busy recomputing the suggested retail prices (SRPs) of every single one of their models in order to comply with TRAIN, or Republic Act 10963.
We at AutoIndustriya have been asking our contacts in the auto industry for their 2018 prices, given that RA 10963 was supposed to take effect starting January 1.
But it seems many players in the industry are on the edge of their seats before releasing their official prices. The reason is that many of the car companies are waiting for the implementing rules and regulations (IRR) of TRAIN before hopping on board.
“Although the new tax bill has already been signed by the president, the Implementing Rules and Regulations have not been published at this time,” said Mr. Mikko David, the PR and Customer Relations Manager of Bermaz Auto Philippines, the official distributor of Mazda.
“We intend to publish the updated pricing as soon as the IRR is published. Until such time, customers may refer to our authorized dealerships for the latest pricing and prevailing promotions.” continued Mr. David.
AutoIndustriya.com also contacted Isuzu Philippines Corporation who also shared a similar statement.
"Although TRAIN has been approved already, we at Isuzu are still waiting for the government to release the IRR before we announce our price changes," said Mr. Joseph Bautista, the Division Head for Sales and Marketing of Isuzu Philippines Corporation.
Even the head of Ford Philippines chimed in and issued a quick response to our query.
"Our 2018 pricing list will be available soon, reflective of the new auto excise tax structure," said Mr. Bert Lessard, Managing Director of Ford Philippines.
The wait for the IRR is the general sentiment amongst the many car companies in the Philippines, prompting them to hold the official release of their 2018 price lists. Some of the other corporations, on the other hand, are also waiting for the approval of top management for their 2018 official SRPs which, in turn, is also dependent on the release of the IRR.
The situation is unusual particularly at the dealership level as their sales teams require the official SRPs or MSRPs in order to formally start selling 2018 models this month. Some dealer personnel have also been leaking dealer bulletins (essentially internal memos) indicating potential 2018 prices, but until an announcement comes from the distributor and/or manufacturer, these cannot be treated as official.