Safeguard measure on cars, LCVs to stunt industry growth by 5 years

Published January 22, 2021, 6:30 AM

by Bernie Cahiles-Magkilat

The implementation of the safeguard measure on imported completely built-up (CBU) passenger cars and light commercial vehicles (LCVs) is expected to stunt industry growth, pulling back by five years or to 2016 level as sales are projected to hit 397,000 units only by 2025 instead of 439,000 units without the punitive tariff.

This industry forecast was presented by Kia Motors Philippines Inc. during a media roundtable where the company laid down its aspiration to double its market share by a solid 2 percent this year from the current 0.9 percent and triple its sales from the current 2,000-unit level only.

Based on its data, with the safeguard measure the industry sales growth is expected to be limited to 10 percent only from 20 percent over a five-year period. From the 2020 level of 248,000 units, which is 40 percent lower than 2019 due to the impact of the pandemic, sales are expected to reach 273,000 units only this year. Sales are expected to further grow to 313,000 units in 2022. For 2023, sales are expected to reach 344,000 units to 378,000 units in 2024 and 397,000 in 2025.

This means that the industry’s sales by 2025 of 397,000 units would just be similar to the industry’s performance 5 years ago or in 2016 where sales reached 402,000 units already.

Without the safeguard measure, the industry was supposed to reach 301,000 units in 2021 to 345,000 units in 2022 and 380,000 units in 2023. By 2024, sales should breach the 400,000-unit mark to 418,000 units and 439,000 units in 2025.

The Department of Trade and Industry has imposed a safeguard measure of P70,000 per unit of imported cars and P110,000 per unit of LCVs from various countries to stop the surge in importation

that caused serious injury to the domestic industry and to save jobs in the auto sector.

Kia Philippines President Emmanuel Aligada

Meanwhile, Kia Philippines President Manny Aligada announced they intend to bring in two models this year and possibly two more driven by the company’s confidence for growth for their model line-up.

 “Looks like things are moving positively,” said Aligada.

To support its growth, the company will make 5 more new dealership appointments this year for a total of 45 dealership network. Kia has ramped up its network since its started two years ago under the Ayala Group from 30 only dealers and further increased to 40 in 2020 up to 45 this year.

Aligada further noted its strategic dealership distribution with 12 dealers in Metro Manila, 16 in Luzon, 9 in Visayas and 8 in Mindanao.