Carmakers press recall of tariff hike, warn of losses reaching P100 M per month

The local automotive industry may bleed by as much as P100 million a month of the government continues to stall on reversing a recent Malacañang decision which increased tariffs on completely knocked down (CKD) vehicles to 10 percent from the previous three percent.

Executive Order (EO) No. 334 retroactively implements new tariff rates for 2001 to 2004 starting Jan. 1.

"The seven percentage point increase is not a joke," Serafin M. Pantaleon, senior vice president of Toyota Motors said yesterday, adding that "Toyota will be the most badly hit by the inadvertent increase in tariff rates on trucks and utility vehicles."

He said the tariff increase is equivalent to five percent – eight percent, or about P26,000 increase per unit on Toyota’s best-selling Asian utility vehicle Revo. Toyota accounts for 30 percent of the AUV market.

"Toyota is not alone in its complaints about the increase in tariff rates," Pantaleon said, adding that "even the Philippine Automotive Federation Inc. and the Car Manufacturers Association of the Philippines are objecting to the increase in tariff rates on trucks and utility vehicles."

He urged the government to "rectify the mistake as soon as possible by issuing an amending EO.

"Toyota has been trying to hold off on any price increase on its utility vehicles, hoping that government will do something immediately to rectify the mistake," Pantaleon said.