As we mark the first half of 2018, various groups like the Association of Vehicle Importers and Distributors (AVID) report how it performed during the said period. For its part, the association reported a slight downward slide with 43,138 units sold, which was down from the 48,344 vehicles released during the same period last year.
The Passenger Car segemtn saw 16,176 cars leave showroom floors from January to June 2018. This was down from the previous 18,769 units of half-year 2017. The Commercial Vehicle category, on the other hand, had 26,528 vehicles sold versus the 29,575 released in 2017. Hyundai leads the way for PC sales while Ford led the charge for the LCV class.
While many may pin the latest trend on the recently passed Tax Reform for Acceleration and Inclusion (TRAIN) Law that raises vehicle prices due to higher excise taxes, it isn’t all about increased retail pricing. More than a few consumers may have also been affected by higher fuel prices, which in turn put a damper on travel expenses. In addition, increased interest rates likewise mean lesser borrowings for such large ticket items.
As if these weren’t enough, remember that there was a beeline to purchase new vehicles in late 2017 in order to beat the TRAIN law. This translates to less folks buying new cars for this year since they already got their ride last year.
Still, AVID is confident that the effects of the TRAIN law on vehicle prices and fuel products will only be temporary. Consumers will soon get used to the higher sticker prices and eventually purchase new cars and commercial vehicles to replace their existing ones. Moreover, lower or even tax exemptions on hybrids and pickup trucks, as well a new tax structure on luxury vehicles could equate to more people going for such types of vehicles.
Of course, all this remains to be seen as we go thru the second half of 2018.