Automakers warn of higher costs as peso remains weak

MANILA, Philippines — The depreciation of the Philippine peso is seen to result in higher costs for automotive firms as well as adjustments in the prices of vehicles, according to the Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI).

“With the depreciation of the yen and the peso, definitely it will increase our costs. That will even have an impact on price. Then we will have to adjust the price if the impact is so big,” CAMPI president Rommel Gutierrez told reporters on the sidelines of the 8th Philippine International Motor Show yesterday.

On Wednesday, the peso further depreciated by 34 centavos to close at 57.11 against the dollar.

“Definitely it (weaker peso)has an effect on our operations because we still import parts and components and even the completed units,” Gutierrez said.

“So any change in the foreign exchange definitely has impact on the auto industry,” he said.

Asked if the depreciation of peso is seen to impact demand for vehicles in the country in the remaining part of the year, Gutierrez said “We will see,” adding that the industry has its own projections and adjustments.

Gutierrez, however, stressed that the overall outlook for the industry in the remaining part of the year is optimistic as vehicle sales continue to rise.

He said the industry is on track to meet its annual sales target this year of 336,000 units.

Based on a joint report by CAMPI and Truck Manufacturers Association (TMA) released earlier this week, total new motor vehicle sales from January to August increased by 25.1 percent to 212,872 units.

Month-on-month, CAMPI-TMA sales almost doubled to 30,185 units from 15,847 units last year.

Gutierrez earlier said the industry’s recovery is on track, with monthly sales hitting above 30,000 units – a pre-pandemic monthly performance level last recorded in 2019.

Pre-pandemic annual sales were at 400,000-plus units.

“It’s really a good sign, we think it’s just a matter of time that  maybe next year we will be able to reach pre-pandemic levels,” Gutierrez said.

He said improving supply and consumer confidence would boost car sales, adding that automotive firms are also implementing a lot of promos.