Prius in RP: Going green does not come cheap

MANILA, Philippines - The Prius, the world’s best-selling hybrid car, finally goes on sale in the country today at major Toyota dealers nationwide.

The 1.8-liter third generation gasoline-electric hybrid can get up to 38 kilometers per liter and significantly cuts down on carbon emissions, meeting the strictest emission-reduction standards worldwide.

But going green in the Philippines doesn’t come cheap. The Prius has a price tag of P2.2 million, about half of it going to taxes – import duties, excise taxes, and value-added tax (VAT). This is more than double its price in Japan of $20,900.

“Toyota believes that a lot more customers would benefit if a special tax incentive will be given for the Prius to bring its cost down,” said Raymond Rodriguez, first vice president for vehicle sales operations of Toyota Motor Philippines Corp.

There are moves to provide incentives to environment-friendly vehicles.

House Bill 2084 authored by Ilocos Norte Rep. Ronald Singson, son of former Ilocos Norte governor and now deputy national security adviser Luis “Chavit” Singson, seeks to give importers and manufacturers of hybrid vehicles a break on duties and taxes. While the Chamber of Automotive Manufacturers of the Philippines (CAMPI) and Toyota Philippines have made presentations before the House of Representatives’ ways and means committee chaired by Antique Rep. Exequiel Javier, the committee has yet to hold formal hearings on the bill.

Last April, the Japanese government implemented significant tax breaks for environment-friendly cars, both as a means to stimulate the economy and to encourage green technology.

As a result, data from the Japan Automobile Dealers’ Association showed that Toyota sold 10,915 units of the Prius in May, more than five times the number sold in the previous month.

Toyota dealers in Japan have reportedly placed orders for a total of 110,000 units of Prius for the year.

Hiroshi Ito, president of Toyota Philippines, said that by the end of last year, “combined Toyota and Lexus hybrid cumulative global sales reached 1.7 million units, 70 percent of which are Prius.”

The 1.7 million hybrid vehicles are estimated to have taken nine million tons of carbon dioxide from the atmosphere.

The first Prius went on sale in Japan in December 1997.

Alfred Ty, vice chairman of Toyota Philippines, earlier told The STAR that they started working on bringing the Prius to the Philippine market as early as three years ago.

But there were initial concerns about the adaptability of the hybrid to local conditions, specifically the bad roads and floods.

Rodriguez assured us that with the improvements incorporated into the third generation Prius, these concerns – as well as those related to temperature and humidity – have all been addressed and are no longer an issue.

Toyota Philippines is targeting sales of 100 units of Prius this year. While acknowledging that the Prius is a “specialty product targeting a very niche market,” Rodriguez nevertheless said that “is always a good time to introduce an eco-friendly product, especially now that there is greater awareness on environmental preservation.”

Reports from CAMPI show that there has been no drastic decline in the automotive market. As of May 2009, the market only registered negative growth of 4 percent compared to the same period last year.

The Prius, the global pioneer and standard for hybrid technology, allows the car to run solely on its gasoline-operated engine, its electric motor, or a combination of both. Its new shape allows for maximum aerodynamic efficiency, and the aluminum and high-tensile steel makes the car lighter, sleeker and more stylish.

Waiting for incentives

The hefty price tag of P2.25 million of the hybrid car Toyota Prius is expected to go down once the government grants fiscal incentive to the distributor, Ito said.

During the car’s launch Friday evening, Ito revealed that more than 30 percent of the cost of the car goes to the national government in the form of taxes.

Ito said that they are paying three kinds of tax to the government, the import tax, the excise tax and the value added tax.

The executive said that the auto industry has already requested for incentives from the government for this environmental friendly car but there is still no response from the Department of Trade and Industry (DTI).

“Once the incentive is introduced the price may go down,” he noted.

Likewise, Ito said that the Prius is not covered by the perks granted under the Japan-Philippines Economic Partnership Agreement (JPEPA) because it runs on 1.8 liters and not the 2.0 liters.

The launch came in spite of the slowdown in consumer demand which has affected the local automotive industry.

Even though hybrid cars are more expensive, Ito said they have been getting inquiries regarding hybrid vehicles. “There is a demand,” Ito said. - with Elisa Osorio